After three days of significant gains, the Australian dollar is retreating against its US counterpart, with the pair falling to 0.6573.
The US dollar has rallied after Federal Reserve officials expressed doubts about an immediate easing of monetary policy. The debate on interest rates and the timing of their reduction has become a central issue in the market. Signs that the Federal Reserve is set to cut rates three times this year, making borrowing costs more affordable, have put pressure on the US dollar, allowing other currencies to recover. However, signs that the Federal Reserve is still waiting for more data before making a decision have led to a rally in the dollar and a drop in overall market sentiment.
Statistical data from Australia revealed that import volumes grew by 4.8% month-on-month in February, compared to a previous increase of 1.4%. Export volumes decreased by 2.2% month on month, with the January figure at 1.5%. The positive trade balance in February was the lowest in five months, mainly due to a drop in iron ore shipments abroad.
For the third consecutive meeting, the Reserve Bank of Australia (RBA) has left the interest rate unchanged at 4.35% per year, its highest level in 12 years. Meanwhile, the RBA has omitted any mention of possible rate hikes in its comments, hoping to reduce inflationary pressure. This has led to forecasts that borrowing costs in Australia could decline later this year.
AUD/USD Technical Analysis
A downward wave to 0.6480 and a correction to 0.6617 have been completed on the AUD/USD H4 chart. We expect the start of a new decline to 0.6422. Today the first descending structure is forming with a target at 0.6520. After completing this, we anticipate a consolidation range. Breaking out of this range to the downside could trigger a wave towards 0.6472, potentially extending the trend towards 0.6422. The MACD indicator, with its signal line below zero, supports this scenario, awaiting new lows.
A descending wave structure is forming on the AUD/USD H1 chart to 0.6520. After this, a correction to 0.6572 and a fall to 0.6490 is anticipated, continuing the trend until 0.6422. The stochastic oscillator, with its signal line currently below 20 but about to rise to 50, technically supports this scenario.
By RoboForex Analysis Department
Disclaimer
Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
