Good day, dear traders!
Today, on the last day of the week's trading, we will briefly analyze the AUD/USD currency pair. Let's start with the two central banks' positions. As we know, the Reserve Bank of Australia (RBA) has recently taken a more optimistic stance, which is still more of a wait-and-see nature. Following the Federal Reserve in the US, the RBA is getting ready to markedly reduce or even end its quantitative easing program next year. Of course, this will only happen if the situation with the COVID-19 pandemic and its new Omicron strain favors this approach in the Australian central bank's monetary policy. At the moment, in the view of the Australian regulator, the economic recovery is very robust and the new Omicron strain does not pose such a significant threat to the further recovery of the labor market and the Australian economy. At the same time, there has been some recovery in US inflation expectations. In particular, this was announced by the St Louis Fed. However, the Open Market Committee's main report has yet to confirm all of this. In the meantime, let's consider the AUD/USD price charts.
Daily
As it is shown on the chart, in the last three days the Australian dollar has been rising actively against the US dollar. If this trend continues, the pair AUD/USD could reach the price range of 0.7276-0.7292. That is where the 50.0 Fibonacci retracement grid level of 0.7557-0.6995 passes. There also passes the strong technical level of 0.7280, right above which are the blue 50-simple and black 89-exponential moving averages. In my personal opinion, in case Aussie bulls reach the marked zone, they will face a very serious challenge in terms of further upside. I believe that only confident consolidation of the quotation above 0.7300 will create good prerequisites for the continuation of the rise. At this point in time, the pair is trying to continue the three-day rise seen earlier. However, this is not very successful so far.
H1
On the hourly chart, we can see the attempts of the upside players to continue moving the quote upwards. However, much will depend on whether they can overcome the nearest resistance at 0.7253. If a candle or a pattern of candles, which would indicate a downwards reversal, appears below this level, this would be a signal to open a sell. I also recommend paying attention to the presence of a bearish divergence in the MACD indicator. I think that in the current situation it is rather risky to buy. Firstly, the pair has already strengthened quite well, and downward correction pullback is very probable. Secondly, bearish divergence and thin market are not favourable to open buy deals, especially near strong sellers' resistance. It is quite possible that on Monday, given the actual weekly trading close, we will take another look at this instrument and identify more specific trading options.
Have a good weekend!
