The Australian dollar strengthened to $0.69, reaching its highest level since mid-February. Divergences in monetary policy between the Federal Reserve System (FRS) and the Reserve Bank of Australia (RBA) have become more visible. At its June meeting, the Fed left its target federal funds rate unchanged at 5-5.25% after data showed headline inflation slowed sharply to 4% in May. On the other hand, the RBA unexpectedly raised interest rates, pushing the cost of borrowing to an 11-year high of 4.1%. The RBA said the increase would provide more confidence that inflation would return to its target within a reasonable time frame, adding that further tightening might be needed in the near future. In the first quarter of 2023, Australian consumer inflation stood at 7%, declining from a 30-year high of 7.8% in the previous quarter but exceeding forecasts of 6.9%. Meanwhile, the country’s economy grew by 0.2% in the first quarter, the slowest growth rate in the last six quarters, mainly due to weakening consumer demand.
AUD/USD Weekly Forecast June 19 — 23, 2023
Currency pair Australian Dollar to US Dollar AUD/USD completes the trading week near the area of 0.6881. The pair continues to move as part of the development of a strong bullish correction and a long-term downward channel. Moving averages indicate a bearish trend. Prices have broken through the area between the signal lines up, which indicates pressure from buyers of the asset and a potential continued growth in the value of the currency pair. At the moment, we should expect an attempt to develop a bullish correction and test the resistance area near the level of 0.6955. Then, a rebound and continued fall of AUD/USD with a potential target below 0.6115 in the foreign exchange market.
An additional signal in favor of the fall of the pair on Forex will be a rebound from the upper border of the descending channel. The second signal will be a rebound from the downtrend line on the relative strength index (RSI). Cancellation of the option of falling the AUD/USD currency pair in the current trading week June 19 — 23, 2023 will be a strong growth and a breakdown of the level of 0.7045. This will indicate a breakdown of resistance and a continuation of the rise of the Australian Dollar on Forex with a potential target at the level of 0.7325. A confirmation of the development of the decline will be a breakdown of the support area and the closing of prices below the level of 0.6515, which will indicate a breakdown of the lower border of the bullish channel.
AUD/USD Weekly Forecast June 19 — 23, 2023 suggests an attempt to develop a bullish correction and test the level of 0.6955. Further, the continuation of the decline of the currency pair below the level of 0.6115. In favor of the fall of the pair in the current trading week, a test of the trend line on the relative strength index (RSI) will come out. Cancellation of the downside option will be a strong growth and a breakdown of the 0.7045 area. This will indicate a breakdown of the resistance area and continued growth of the pair with a target above 0.7325.
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