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The AUDUSD Develops an Uncertain "Bearish" Signal

3/7/2023 10:34 AM

The AUD/USD pair shows a rather active decline, developing an uncertain "bearish" signal formed the day before and testing the level of 0.6700 for a breakdown.

The focus of investors is the decision of the Reserve Bank of Australia (RBA): the interest rate was increased by 25 basis points to 3.6% against the backdrop of relatively high inflation risks. At the same time, the regulator expects consumer prices to slow down in the coming months on the back of global events and some reduction in domestic demand, while the indicator in the service sector is likely to correct more slowly. The current forecast assumes that consumer inflation will reach 3.0% by mid-2025. In addition, the RBA pointed to a tense situation in the labor market. The Unemployment Rate remains near 50-year lows, but Employment in the country continues to decline, while many companies are experiencing difficulties in hiring workers, and in order to further stabilize the situation in the economy, the financial authorities are likely to continue the "hawkish" monetary policy aimed at tightening monetary stimulus.

In turn, macroeconomic data from Australia did not have a significant impact on the dynamics of the instrument. January Exports added 1.0% after declining by 1.0% in the previous month, while Imports accelerated from 1.0% to 5.0%, which led to a reduction in the Trade Surplus from 12.237 billion Australian dollars to 11.688 billion Australian dollars, while the market expected it to grow to 12.500 billion Australian dollars.

Bollinger Bands on the daily chart show a steady decline. The price range is narrowing from below insignificantly, remaining rather spacious for the current level of activity in the market. MACD is correcting again after a short attempt at growth at the end of last week, having formed a new sell signal (the histogram is located below the signal line). Stochastic, which also maintained an upward direction, reversed into a horizontal plane, indicating the emergence of mixed trading dynamics in the ultra-short term.

Resistance levels: 0.6750, 0.6800, 0.6850, 0.6900. | Support levels: 0.6700, 0.6628, 0.6583, 0.6520.

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