The Aussie tries to retrace the fall following the FOMC interest rate decision as it bounces back from a new 2021 low (0.7475), with the RSI oscillator indicating a typical buy signal as it rebounds from oversold territory and climbs back above 30.
The AUDUSD pair trades now below the 200-Day SMA for the first time since June 2020 as the Fed officials forecast two rate hikes for 2023, while the Reserve Bank of Australia (RBA) appears to be a on a preset course as the central bank is unlikely to achieve its policy targets “until 2024 at the earliest.”
It appears that RBA is in any rush to change as the central bank promises to “not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range,” and Governor Philip Lowe and Co. may continue to strike a dovish forward guidance in the second half of the year as “inflation and wage pressures are subdued.”
However, the RBA may plan out a plan B at its next interest rate decision on July 6 as officials “consider future bond purchases following the completion of the second $100 billion of purchases under the government bond purchase program in September,” and signs of a impending move in monetary policy may boost AUDUSD if the central bank shows a greater willingness to wind down its emergency tools.
Till then, the Aussie continues to retrace the decline following the Fed rate decision as the RSI bounces back from oversold territory, but the recent shift in retail sentiment looks poised to persist as the exchange rate trades below the 200-Day SMA (0.7550) for the first time since June 2020.
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