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Australian Dollar Wins Back Monday's Losses

12/6/2022 10:36 AM

The Australian dollar shows moderate growth, recovering from the active decline. The AUD/USD pair is testing 0.6730 for a breakout, receiving support from the final minutes of the meeting of the Reserve Bank of Australia (RBA).

Today, as expected, the regulator decided to raise the interest rate by 25 basis points to 3.10%. In the follow-up statement, the RBA notes that the country's inflation rate remains alarmingly high. First of all, the sharp rise in prices is due to a number of external factors, as well as the rapid increase in the cost of energy. However, there are also internal reasons, such as high demand and a tense situation in the labor market. The RBA expects that inflation will continue to grow at least until the end of this year and may reach a peak around 8.0% (according to October data, the figure was at the level of 6.9%). After that, a gradual decline in the Consumer Price Index is predicted as external factors stabilize and the domestic market reacts to a rather sharp tightening of monetary policy conditions. Inflation is expected to return to 3.0% closer to 2024.

The instrument is still slightly supported by macroeconomic data from Australia, published on Monday. The Commonwealth Bank Services PMI rose from 47.2 points to 47.6 points in November, and the Composite PMI rose from 47.7 points to 48.0 points.

In the D1 chart, Bollinger Bands are reversing horizontally. The price range is almost constant, remaining rather spacious for the current level of activity in the market. MACD is falling, keeping a relatively strong sell signal (the histogram is below the signal line). Stochastic is showing similar dynamics being located in the middle of its area.

Resistance levels: 0.6750, 0.6800, 0.6853, 0.6900. | Support levels: 0.6700, 0.6650, 0.6583, 0.6520.

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