Aussie Falls as Sentiment Improves
14 March 2022
The AUDUSD pair was down 0.7% today as US yields advanced to new cycle highs, strengthening the USD against some of its counterparts.
The Australian dollar has behaved rather strangely during the Russia-Ukraine war as it rallied on lousy news and declined on good news. Usually, it's the other way around with the Aussie - it tends to strengthen on positive news and decline on negative news.
Nevertheless, the AUDUSD pair has failed to stay above the 200-day moving average (the green line) as the Fed is about to start raising rates this week. And because inflation seems unstoppable, the central bank will likely increase the pace of rate increases throughout the rest of the year.
Therefore, the next support could be at the 50-day moving average (the purple line) at around 0.72, and if the Aussie breaks below it, further declines toward 0.71 could occur.
The MACD indicator is about to send a bearish signal on the daily chart, likely supporting the bearish bias in the following days.
Alternatively, the resistance for the near future is at 0.73, where previous highs are converged with the 200-day average. Once the Aussie jumps above that level, it might continue higher toward March highs at 0.7445.