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The AUDUSD is Updating Record Highs

1/3/2023 12:01 PM

During the Asian session, the Australian dollar is actively adding in value, developing a "bullish" trend, which was formed on December 23. At the moment, the AUD/USD pair is testing 0.6830 for a breakout and updating local highs from December 15.

Significant support for the instrument today is provided by macroeconomic statistics from Australia. Thus, the Manufacturing PMI, published by the Commonwealth Bank of Australia and S&P Global, rose from 50.4 points to 56.9 points in December, which turned out to be much better than analysts' neutral forecasts. Buying activity was also supported by the December data from China, where the Caixin Manufacturing PMI slowed down from 49.4 points to 49.0 points, while traders were counting on 48.8 points.

Meanwhile, experts are counting the profits from the Christmas and New Year sales, and according to Bloomberg, consumer demand on the eve of the holidays not only did not decrease, but also amounted to a record 74.5 billion Australian dollars. On Boxing Day, sales increased 15.3% compared to a year earlier, reaching 1.23 billion Australian dollars. Thus, the "hawkish" policy of the Reserve Bank of Australia (RBA) in terms of raising the interest rate, which is already at 3.1%, does not yet exert significant pressure on buying activity; however, the regulator noted that it would monitor consumer behavior when determining its further course.

The growth of the AUD/USD pair at the beginning of the year is also due to expectations of further easing of monetary policy by the US Federal Reserve. The market expects two interest rate hikes in the range of 25-50 basis points this year, after which the regulator is likely to try to take a wait-and-see attitude to analyze the results of the steps already taken.

On the daily chart, Bollinger Bands demonstrate the flat trading dynamics. The price range is narrowing, reflecting ambiguous nature of trading in the ultra-short term. MACD is growing, maintaining a relatively strong buy signal, being located above the signal line. Stochastic, having approached its high, reversed into a horizontal plane, indicating the risks of a corrective decline in the nearest time intervals.

Traders should wait for the specification of technical indicators to open new positions on the instrument.

Resistance levels: 0.6850, 0.6900, 0.6950, 0.7000. | Support levels: 0.6800, 0.6750, 0.6700, 0.6628.

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