Close But Above
The AUD/USD trading pair successfully breached the narrow dimensions restricting it and subsequently was able to attract much-needed bids early on Wednesday’s trading session. The pair aims to recover the high gained on Tuesday at 0.7291 before it suffered a bit of pullback in the direction of 0.7255.
AUD/USD price chart. Source TradingView
Initially, the pair was swinging between a limited range of the high and low of Tuesday at 0.7237 – 0.7291 after a solid rally to recover from the lows of Monday’s trade at 0.7167 all the way to Tuesday’s high reaching 0.7291.
It is widely known that a consolidation episode suggests placement of longs by market players who did not capitalize on the first rally or the investors placing a bid at such time, who instead would go into an auction following the setting in of bullish biases.
The trading pair is currently holding above the 50-day and 150-day exponential moving average (EMA), which is an addition to the upside trends. The pair’s relative strength index is also moving between the 40.00 – 60.00 ranges and indicates a lackluster movement in the trend.
For an upward trend, bullish traders might get significant bids close to the pullback seated at 0.7255, while it is expected to shoot the pair towards 0.7291, which was the high gained on Tuesday. Any breach in the latter has the potential of exposing the high of 13th January at 0.7315.
On the other side, bearish traders could come to dictate levels if the pair happens to slide under the 150-day exponential moving average at 0.7250 in the direction of Tuesday’s low level at 0.7237 and the average traded price of Monday at 0.7217.
AUD Set to Perform Better in the Near-term
On Tuesday, the Reserve Bank of Australia became the first G10 central bank to have a meeting since the Russia-Ukraine war started. According to statements ascribed to economics at Japan’s MUFG bank, the Reserve Bank of Australia’s policy statement has the high potential of keeping hope alive that the apex bank is putting in efforts to increase interest rates that have been a source of support to the Australian dollar of late.
The Reserve Bank of Australia is equally taking note that the regional tensions in Eastern Europe have been a significant source of global concern. The reserve now focuses on the risks that the conflict might pose around the rapidness of inflation rates rather than the material impact it might otherwise have on growth. There is currently an expected increase in the Consumer Price Index due to such factors as higher gas prices and other daily commodities resulting from the geopolitical developments.