Australian Dollar Trades Positively

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Australian Dollar Trades Positively

Australian Dollar (Aud) Trades At 0.6560

The winning streak of the Australian Dollar (AUD) continues on Monday as the AUD/USD is seen near 0.6560. The upside momentum seen in the AUD/USD is mainly driven by the expectations of a hawkish RBA.

It all started after the release of the CPI inflation, which exceeded expectations and thus increased the hopes that the RBA would continue with its hawkish stance.

Rba To Hike Rates Three Times In 2024

According tot he Australian Financial Review, the Reserve Bank of Australia will likely introduce 3 rate hikes in 2024. So if this turns out to be true, it will send the cash rate in Australia to 5.1%. As for when the RBA will introduce the first rate hike, it will likely happen in August 2024.

Looking ahead, the AUD/USD traders will also be looking forward to the retail sales (March) along with AU consumer spending habits. Both of these data releases shed light on the GDP and inflation trends.

look at the DXY shows that the market is now favoring a risk-on sentiment, which means gains for AUD & similar currencies.

However, many experts believe that no change will be made to the interest rate at Wednesday's meeting. The reason for this is the recent jump in inflation, which has stoked fears of a resurgence of high inflation. According to the FedWatch Tool, there's an 87.7% chance that the interest rate will remain the same at the next meeting.

For now, the AUD is trading near 0.6560 with a bullish advance inside a triangle pattern formation. As for the RSI, it is near the 50, which means the AUD bulls are in charge of the momentum.

As for what's ahead for the AUD/USD, the key resistance levels are present at 0.6600, followed by 0.6639 and 0.6650. On the way down, the nearest support level is present at the 0.6500 handle, followed by 0.6443 and then 0.6362.

Overall, the Fed's decision not to change the interest rate is already priced in, which means the fundamentals now support AUD instead of USD.

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