- English (UK)
- English (UK)
Analysis
.jpg?height=93&quality=100)
Since the shock 25bps hike by the RBA at their meeting this week. They also guided for further rate hikes being necessary over the months ahead. This is clearly a turning point for the Aussie dollar. Westpac now sees a 40bps hike in June, while Goldman Sachs expects rates to be lifted to 2.6% by December 2022 with back to back 50bps hikes in June and July. We’ve got the BoE up tomorrow and many now see them putting GDP growth ahead of inflation and potentially performing a dovish pivot. This would lead to a divergence between the RBA and BoE as one pivots dovish while the other hawkish. While both currencies are exposed to risk sentiment souring, at least the RBA should keep an interest rate advantage over GBP.
(Source: TradingView - Past performance is not indicative of future performance.)
We've seen this cross run into some resistance at the 50-day SMA and roll over. The RSI is also following price directionally, but not at any key levels to provide informational value. For the bulls a move back into the 1.78 region around the 50-day SMA could be a potential target level, while on the downside, 1.75 will be key (white horizontal line). A break below there and the early April lows open up around 1.72.
Ready to trade?
It's quick and easy to get started. Apply in minutes with our simple application process.
The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.