Daily Market Analysis from Investizo

Daily Market Analysis from Investizo

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      General analysis AUDUSD for 03.05.2022

      Current dynamics

      The AUD/USD pair strengthened on Tuesday following the Reserve Bank of Australia’s monetary policy meeting. Market participants assumed that the regulator would raise the rate, but the volume of the increase came as a surprise to investors. The RBA raised the rate immediately by 25 basis points to 0.35%. Remarkably, this is the first increase in the last ten years. 
      The head of the Australian regulator Philip Low stated that the central bank intends to take additional measures to accelerate the withdrawal of large-scale pandemic stimulus. The RBA is doing all it can to get the inflation rate back to its target level and therefore expects the regulator to conduct several rounds of monetary policy tightening in the coming months. However, it is worth noting that the Fed meeting is due tomorrow and the upside potential of the AUD is limited as the American regulator wants to fight the high price pressure with more aggressive measures. The Fed is expected to raise rates by 50 basis points tomorrow and in an accompanying commentary it will announce plans for further policy tightening. In addition, the US central bank is likely to announce the start of the procedure to reduce the Fed’s bloated balance sheet. Also do not forget about the difficult epidemiological situation in China, which has a strong negative impact on the currencies of the Pacific area.
      Today at 16:00 (GMT+2), US labor market statistics will be released. Tomorrow at 03:30 (GMT+2), Australia will release retail sales data. The Fed meeting will begin at 20:00 (GMT+2) on Wednesday May 4.Support and resistance levels

      On the 4-hour chart the instrument is consolidating in the upper Bollinger Band range. The nearest support level is the moving average of the indicator. The indicator is directed downwards and the price range remains wide, indicating a continuation of the downtrend. MACD histogram is in the negative zone, holding a sell signal. Stochastic is not showing a clear signal to open positions.
      ✔️ Support levels: 0.6960, 0.6985, 0.7020, 0.7050, 0.7090.
      ✔️ Resistance levels: 0.7130, 0.7165, 0.7205, 0.7240, 0.7300.

      Trading scenarios

      ✔️ Short positions should be opened at the current price with targets 0.06985, 0.6960 and a stop loss at 0.7170. Implementation period: 1-3 days.
      ✔️ Long positions can be opened above the level of 0.7170 with a target of 0.7240 and a stop-loss at 0.7130. Implementation period: 1-2 days.

      Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument.

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