Aussie Gains New Uptrend
The export-dependent pair of the AUD/USD has stopped its retreating trajectory close to the 0.7420 area as it currently aspires to retake the 0.7450 area before the European session opens.
The new uptrend seen in the Australian dollar is dominant as a result of the new sales trend that visited the US dollar as the pair took a pause in its recovery against its leading peers in the midst of the market mood getting upbeat. The US dollar was not successful in sustaining its own recovery in spite of the recovery achieved in the US Treasury bond yields that went across the recovery curve.
AUD/USD price chart. Source TradingView
There was also a very cautious mood over the market on the side of investors as the general market expected speech and a myriad of policy statements from an array of major central banks across the globe. The statement expected from the Chairman of the US Federal Reserve, Jerome Powell, is much eagerly anticipated as it would confirm or refute the latest hawkish policy set to be announced.
Whereas, the change in policy from a hawkish standpoint by the Reserve Bank of Australia in its forward guidance, as made known through the reserve’s published April meeting minute, has equally kept the market sentiments towards the Australian dollar afloat.
Aside from the expected speeches and the appearance of Jerome Powell in the US especially, market players are also focusing on the American economic dockets, which are expected to feature the publication of the manufacturing index from the Federal Reserve in Philly, as well as the regular unemployment claims that come in every week.
0.7233 to Keep Being the Major Support Line
Analysts at DBS Bank Limited have said that the Australian dollar is having the benefits of an undercurrent from bullish traders as it is in the process of working out the right part of an impending bullish inverted head and shoulder pattern. For the time being, the price route conspicuously contains the latest near-term covering charge, which is at 0.7661.
In other words, the Australian dollar is currently on an upswing in the medium term.
The Australian dollar remains set to take up challenges at higher levels. If it stays over its 200-period daily moving average at 0.7152, it will be an envious thing for investors to buy the dip in the busy right-side shoulder of the impending bullish inverted head and shoulder.