- The Australian dollar recovers after the sharp drop suffered after the RBA meeting.
- The US dollar gets mixed results and is supported by rising US yields.
- AUD/USD finds support again around 0.6910.
The AUD/USD extended the recovery after the RBA fell and rose to 0.6965. It is around 0.6950/55, down 60 pips on the day, the worst performance since July 11th.
From the RBA to rising US yields.
The Reserve Bank of Australia raised the key interest rate by 50 basis points. The guidance offered by the central bank was seen as “dovish” and pushed the Aussie lower. AUD/USD fell to 0.6910. After reaching a new daily high at 0.6909, it started to recover.
Since the beginning of the American session recovered more than fifty pips. At the same time, AUD/NZD, which bottomed at 1.1007, the lowest level in two weeks, recovered and, at the time of writing, is trading at 1.1055/60.
The move higher came as stock prices on Wall Street turned positive and the dollar lost momentum against commodity currencies, even amid rising US yields.
The AUD/USD chart shows that the pair is still moving sideways around 0.6970. The 0.6910 area has become critical support which, if broken, should clear the way for more losses, targeting the 20-day SMA at 0.6878 first.
Analysts at Rabobank see the possibility that a new bout of dollar strength will push AUD/USD lower in 1-3 months, but then see a recovery. “We expect AUD/USD to rally to 0.74 zone 12 months ahead.”
Technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
