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AUDUSD Price Decline may Resume

9/20/2022 3:02 PM

The AUD/USD pair is trying to recover the losses incurred a week earlier for the second session in a row, and is currently trading around 0.6730.

The Australian currency is receiving support after the release of the minutes of the Reserve Bank of Australia (RBA) meeting and comments on the budget from the country's Finance Minister Jim Chalmers. Officials of the Australian regulator intend to continue raising the interest rate, which now stands at 2.35%, while preventing a serious slowdown in the economy. Experts expect that in October the RBA will adjust the value by another 50 basis points, but by March the pace of monetary policy tightening may slow down along with a decline in consumer prices. In turn, State Treasurer Jim Chalmers said that the budget deficit for the past fiscal year, which ended on June 30, will be reduced by about 50B Australian dollars due to high commodity prices, primarily iron ore and coal.

The strengthening of the Australian currency is likely to last for a short time, as investors are waiting for another interest rate hike at the US Fed meeting on Wednesday. Officials can adjust the value by 75 or 100 percentage points at once, since inflation in the country still shows no signs of a steady slowdown. The sharp tightening of monetary policy, which leads to the strengthening of the position of the USD, is currently seen as the dominant factor in the market.

The AUD/USD pair maintains a downward trend, which is confirmed by the downward reversal of the Bollinger Bands and the increase in the MACD histogram in the negative zone. Consolidation of the price below 0.6713 (Murray [2/8]) will give the prospect of continuing the decline to the levels of 0.6590 (Murray [0/8], Fibonacci retracement 61.8%), 0.6530 (Murray [-1/8]). An upward reversal of the Stochastic near the oversold zone does not exclude a corrective growth up to the level of 0.6800 (the middle line of the Bollinger Bands), but it is unlikely to lead to a reversal of the current downtrend.

Resistance levels: 0.6800, 0.6835, 0.6900. | Support levels: 0.6713, 0.6590, 0.6530.

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