Aussie flat as Powell testifies

The Australian dollar is unchanged in the Tuesday session. Currently, AUD/USD is trading at 0.7912, down 0.02% on the day.

Will the Aussie break 80?

The Australian dollar has been on an absolute tear in the month of February. The currency has taken advantage of the rotation of the US dollar into cyclical assets, and has jumped 3.58% this month. AUD/USD hasn’t had a losing week since January, and it appears ready to make a move to break the symbolic 80-level, which hasn’t happened since February 2018. One player that is not happy with the sharp appreciation in the exchange rate is the RBA, as a high Australian dollar can be affect price stability and hamper the critical export sector. When the central bank extended its QE programme at the previous policy meeting, bank members noted that the RBA was utilizing QE in order to curb the rise of the Australian dollar.

In the US, Federal Reserve Chair Powell is testifying before Congress, and will do so again on Wednesday. In his testimony earlier in the day, Powell reiterated that the Fed plans to move cautiously, patiently and will provide the markets with plenty of advance notice of any future monetary policy moves. The Fed has assured the markets that it remains in dovish mode, yet despite this, there is speculation in some quarters that the Fed might taper its QE scheme in the near future. The Fed clearly wants to avoid the specter of a taper tantrum, and we can expect Powell to repeat in this week’s testimony that there are no plans to taper QE anytime soon.

.

AUD/USD Technical

AUD/USD remains rangebound in the Tuesday session.

• AUD/USD continues to put pressure on resistance at 0.7923. The next resistance line is at 0.7976
• There is support at 0.7770, followed by support at 0.7670
• The 50-day moving average (MA) is situated at 0.7694

For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.