AUD/USD recovers post RBA rate hike while EUR/USD and EUR/GBP range trade
AUD/USD bounces off its one-year low as RBA raises rates by 50 basis points while EUR/USD and EUR/GBP stay side-lined.
EUR/USD continues to hover above key support
EUR/USD still hovers above the $1.036 to $1.035 May and June lows and last week’s low at $1.0366 despite the US dollar remaining strong as market participants expect the Federal Reserve (Fed) to continue to aggressively raise interest rates to curb surging inflation.
Minor resistance remains to be found at the April low at $1.0471. Above it a one-month resistance line can be seen at $1.0541 with further resistance coming in between the 55-day simple moving average (SMA) and mid- to late June highs at $1.0581 to $1.0615.
While the latter level caps, overall downside pressure should retain the upper hand. Failure at $1.035 may provoke a slide towards parity.
EUR/GBP stays side-lined
EUR/GBP is trading back around its £0.8618 May-high, following Friday’s brief foray to £0.8678, only to then rapidly come off again as Germany posted its first monthly trade deficit since German reunification in 1991.
Minor support sits between the late May and early June highs at £0.8592 to £0.8588 with more significant support being found between the 24 June-low, three-month support line and last week’s low at £0.8568 to £0.8551.
Resistance above £0.8678 can be seen at the currency pair’s one-year mid-June high and the 200-week SMA at £0.8721.
AUD/USD recovers post RBA 50 basis point rate hike
AUD/USD is looking slightly stronger as the Reserve Bank of Australia (RBA) raised its cash rate by 50 basis points (bps) to 1.35% as expected during its July meeting, its third back-to-back rate hike with further hikes in the pipeline.
The central bank pointed out that huge monetary support was no longer needed since the Australian labour market remains strong with unemployment at its lowest in close to 50 years and in view of ongoing inflationary pressures, adding that it would raise rates further still, if needed, and that it will continue to be guided by the data.
The cross so far briefly shot up to $0.6894 from last week’s $0.6764 one-year low with the 28 June-high at $0.6964 being targeted on a rise above the 30 June-high at $0.6919. Slips may find support near the May trough at $0.6829.
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