Last week, the AUD/USD pair sharply corrected downwards and tested the 0.6590 mark (Murray level [2/8]) against the background of differences in the monetary approaches of the Reserve Bank of Australia (RBA) and the US Fed.
Recall that the Australian regulator raised the interest rate from 3.35% to 3.60%, but announced the possibility of a pause in the cycle of tightening monetary policy, as inflation has already reached its peak. At the same time, the head of the US Fed Jerome Powell, speaking in Congress, on the contrary stressed that the fight against price growth is far from over, and the peak level of the interest rate may be higher than previously expected. These comments led experts to believe that the value could be adjusted even to 6.00%, but on Friday many observers changed their minds, the reason for which was the release of February data on the American labor market and the bankruptcy of Silicon Valley Bank (SVB). Thus, the US labor market began to show the first signs of weakening: despite a significant increase in employment by 311.0K, the unemployment rate adjusted from 3.4% to 3.6%, and the growth of average hourly wages slowed from 0.3% to 0.2%. The bankruptcy of SVB due to investor fears and a shortage of liquidity further convinced experts that in the new conditions, the US Fed may abandon a serious tightening of monetary policy or even pause so as not to increase pressure on the financial sector. In this regard, the statements of analysts of the financial conglomerate Goldman Sachs are characteristic, who believe that the American regulator will continue to raise the interest rate in the near future, but its peak level may be around 5.25%-5.50%.
The prospects of a slower increase in the US Fed interest rate pushed the pair up, but for serious growth it will need to break above the 0.6714 mark (Fibo retracement 38.2%, the middle line of the Bollinger Bands, Murray level [3/8]). In this case, the movement targets will be the levels 0.6885 (Fibo retracement 50.0%), 0.6958 (Murray level [5/8]). The key for the "bears" remains the 0.6590 mark, consolidation below which will give the prospect of a decline to the area of 0.6469 (Murray level [1/8]) and 0.6347 (Murray level [0/8]).
The downward trend in the pair persists, as evidenced by the downward reversal of the Bollinger Bands and the stabilization of the MACD histogram in the negative zone. The Stochastic is preparing to leave the oversold zone, which does not exclude new growth attempts, but their potential is seen to be limited.
Resistance levels: 0.6714, 0.6885, 0.6958. | Support levels: 0.6590, 0.6469, 0.6347.