The Australian dollar faced a significant decline last Tuesday, dropping by 1.18% due to higher-than-expected US inflation figures. This surge in US inflation boosted the US dollar, causing the Aussie to plummet. However, the currency has since bounced back and is currently trading at a two-week high against the US dollar.
Investors are eagerly awaiting the release of the Reserve Bank of Australia’s meeting minutes on Tuesday. The RBA decided to maintain the cash rate at 4.35% in February, amid speculations about future rate cuts. The central bank has expressed concerns about persistent inflation not hitting the target range of 2%-3% until 2025. Following a disappointing employment report last week, all eyes are now on Wednesday’s wage price index report, which could influence the chances of RBA interest rate hikes.
Examining the technical analysis on various currency pairs, it is evident that traders are anticipating bearish movements in the market.
GBPAUD
On the H4 timeframe, GBPAUD has been rejected from the supply zone on the weekly timeframe, resulting in a break of structure to the downside. Traders are looking for a potential bearish continuation once the price action completes a retest of the trendline. Key confirmations for this sentiment include Fibonacci retracement levels and trendline resistance.
EURAUD
In the D1 timeframe, EURAUD has faced rejection from the 76% Fibonacci retracement level, with the trendline resistance supporting a bearish bias. Traders are eyeing a potential drop towards the 23% Fibonacci retracement level as the initial target for this sentiment.
AUDCHF
Trading on the daily timeframe, AUDCHF is approaching the 76% Fibonacci retracement level. Notable confluences in this setup are the trendline resistance, supply zone, and the 200-day moving average resistance. Traders are looking at a potential bearish move towards the 23% Fibonacci retracement level.
It is crucial to note that CFD trading comes with inherent risks. To navigate the market successfully, traders must manage risks effectively. Avoiding costly mistakes requires thorough research, due diligence, and appropriate risk management practices. By adequately preparing and understanding potential risks, traders can increase their chances of success in the volatile financial markets.
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