AUD's Strong Performance Ahead Of RBA
Gregor Horvat | Jun 05, 2023 08:29AM ET
The interplay between stocks, the USD, and US yields has once again aligned, indicating a potential shift in the market this week. By examining the overlay chart of the XXX/USD pair, we can observe the remarkable upward trajectory of the AUD/USD from the previous week, which occurred prior to the stabilization of US yields.
The release of Australian inflation figures contributed to the relatively robust performance of the AUD, despite falling short of expectations at 6.8% and remaining below the previous reading of 7%.
Consequently, there is a possibility that the Reserve Bank of Australia (RBA) will adopt a more hawkish stance this week. This anticipated shift could sustain the intraday uptrend of the Aussie, especially when considering the sharp recovery from its recent low, exhibiting characteristics of an impulse wave.
Consequently, further gains may materialize following an a-b-c retracement pattern. Traders are advised to closely monitor these developments in preparation for potential trading opportunities surrounding the RBA rate decision. Notably, a strong support level is identified at 0.6560, while an upward projection ranges between 0.6675 and 0.67. This perspective remains valid as long as the price remains above 0.6459.
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