The Australian dollar is trading in different directions, holding near 0.6770 and local highs from November 16. The activity of the "bulls" at the end of the week is reduced against the backdrop of Thanksgiving Day celebrations in the US.
Earlier, the positions of the US currency came under pressure after the publication of the November minutes of the US Federal Reserve meeting. The document reflected the readiness of the regulator to reduce the pace of interest rate increases in the future, clearly responding to the growing risks for the national economy. In addition, inflation in the country is still demonstrating a slow decline, which is positively assessed by the market and analysts.
In Australia, only publications on business activity deserve the most attention: the Manufacturing PMI fell from 52.7 points to 51.5 points, while the forecast was 52.4 points, and the Services PMI declined from 49.3 points to 47.2 points, which also turned out to be worse than the preliminary estimates of experts at the level of 49.1 points.
The Reserve Bank of Australia (RBA) will raise its interest rate to 3.6% by June, according to an average preliminary estimate of 35 analysts in a Bloomberg poll. The RBA officials will adjust the value upwards at least three more times, and then pause from mid-2023 in an attempt to slow demand and consumer prices without triggering a recession, experts say. The key driver for the continuation of the "hawkish" policy was the release of stronger-than-expected inflation data, which reached 1.8% MoM in the third quarter and corrected from 6.1% to 7.3% YoY amid a strong domestic demand, as well as increased public spending to support households and businesses in the face of an intensifying energy crisis and supply chain problems. Additional pressure on the position of the Australian dollar is exerted by the situation with COVID-19 in China. As it became known yesterday, Beijing has reintroduced a quarantine regime in response to a sharp increase in the number of cases. In just a week, the number of detected cases of coronavirus has tripled, updating the record highs of recent months.
On the daily chart, Bollinger Bands are steadily growing. The price range is narrowed, being spacious enough for the current activity level in the market. MACD is growing, maintaining a relatively strong buy signal, being located above the signal line. Stochastic shows more confident upward dynamics, being close to its highs and indicating the risks of the instrument being overbought in the ultra-short term.
Resistance levels: 0.6800, 0.6853, 0.6900, 0.6950. | Support levels: 0.6750, 0.6700, 0.6650, 0.6583.