AUD/USD Corrected, but Trend is Intact
By Elizabeth Belugina
AUD/USD reached 0.7800 mark, but met resistance at this level. The 2 main factor, which supported the currency pair, were the improvement in the market’s risk sentiment and the expectations of a more dovish approach of the Federal Reserve.
The minutes of the Reserve Bank of Australia’s meeting released this week showed that the central bank isn’t very concerned with higher levels of Aussie. Analysts at Citibank, for example, say that the RBA will start feeling uncomfortable only if AUD/USD rises above 0.8000. No action is expected from the Fed on Wednesday and this may be a positive catalyst for the pair.
Longer term outlook remains bullish and this will change only if Australian dollar falls below 0.7500. In the near term more of correction down is possible, but we will look for the buying opportunities around 0.7700 and 0.7550. Above 0.7800 important levels lie at 0.7850 (38.2% Fibo retracement of the decline from 2014) and the psychological level of 0.8000.