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AUDUSD Market Update

11/3/2022 1:58 PM

The AUD/USD pair is falling for the second week in a row, trying to consolidate below the middle line of Bollinger bands around 0.6340.

The pressure on the Australian dollar is exerted by the difference in approaches to the monetary policy of national regulators. The Reserve Bank of Australia (RBA) slowed down the pace of the interest rate hike to 25.0 basis points instead of 50.0 basis points, bringing it to 2.85%. According to experts, the department's officials are trying to simultaneously slow inflation and prevent a significant increase in pressure on the economy, which could exacerbate both problems.

The US Federal Reserve is trying to fight record inflation even at the cost of the country's economic growth, and yesterday it increased the interest rate by 75.0 basis points, bringing it to 4.00%. The accompanying statement notes that decisions to retain hawkish rhetoric will take into account the cumulative effect of steps already taken and the economic and financial backdrop. Investors took the remark as a hint of a possible slowdown in the pace of monetary tightening, but the head of the department, Jerome Powell, said that patience and determination would be required to reduce inflation, and the peak level of interest rates could be higher than previously expected. The official acknowledged that it is possible to slow down the pace of interest rate hikes but not soon.

Australia's September foreign trade data published today was positive: the volume of exports of Australian goods accelerated growth from 2.7% to 7.0%, while the increase in imports to the country amounted to 0.4%, which allowed bringing the trade surplus to 12.444B Australian dollars but the statistics could not support the Australian currency, as the pressure of monetary factors on it remains dominant.

The trading instrument is trying to consolidate below 0.6340 (the middle line of Bollinger bands, Murrey [0/8]) to continue its decline to 0.6200 (September lows) and 0.6100 (Murrey [–2/8]). The zone 0.6470–0.6525 (Murrey [1/8], Fibonacci retracement 23.6%) is the key "bullish" region, the breakout of which will give the prospect of further growth to 0.6714 (Murrey [3/8], Fibonacci retracement 38.2%) and 0.6835 (Murrey [4/8]).

Technical indicators reflect the development of a decline: Bollinger bands are horizontal, but Stochastic is pointing downwards, and the MACD is increasing in the negative zone.

Resistance levels: 0.6525, 0.6714, 0.6835. | Support levels: 0.6200, 0.6100.

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