EUR/USD awaits rate decisions, USD/JPY nears March high and AUD/USD rallies on surprise RBA rate hike
Outlook on EUR/USD, USD/JPY and AUD/USD as the RBA hikes rates by 25 basis-points ahead of Wednesday’s Fed and Thursday’s ECB rate decisions.
EUR/USD oscillates around the $1.1000 mark
EUR/USD continues to range trade around the minor psychological $1.10 mark ahead of Wednesday’s Federal Open Market Committee (Fed) and Thursday’s European Central Bank (ECB) meeting in which both central banks are expected to hike their rates by 25 basis-points (bp).
Were last week’s low at $1.0963 to give way, the $1.0929 late March high and also the mid-April low at $1.091 would be targeted. If, however, a rise above Monday’s high at $1.1035 were to be seen, the $1.1075 to $1.1095 April highs would be back in the picture. Further up the January 2022 low and early March 2022 high can be spotted at $1.1121 to $1.1122.
USD/JPY rally nears March peak
Last week’s swift rally in the USD/JPY exchange rate, on the back of comments by the newly appointed governor of the Bank of Japan (BoJ) Kazuo Ueda in which he modified the central banks’ forward guidance by removing references to the Covid-19 pandemic and vowed to keep interest rates at “current or lower” levels, has taken the cross close to its March peak at ¥137.91.
Around the March high the exchange rate is likely to at least short-term consolidate. Slips should find support along the 200-day simple moving average (SMA) at ¥136.97, below which there is no significant support to speak of until the ¥135.13 to ¥135.11 mid-March and mid-April highs.
AUD/USD rallies on surprise 25 basis-point rate hike
AUD/USD shot back up to its 55-day SMA at $0.6708 as the Reserve Bank of Australia (RBA) surprised market players with a 25 bp rate hike to 3.85% and hinted at the possibility of further tightening in order to tame domestic inflation which at 7% remains stubbornly high.
The February-to-May downtrend line at $0.6724 has also nearly been reached, as has the 200-day SMA at $0.6734, both of which are likely to at least short-term cap. If overcome on a daily chart closing basis, however, the April high at $0.6806 may be revisited. Minor support can be found around the 24 March and 10 April lows at $0.6626 to $0.662.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
