The Aussie gained about 35 pips as traders deemed that the FOMC’s minutes were not as hawkish as they were anticipating. Gold also gained about $6 on the news and traded up to $1,295 a troy ounce as AUD is also affected by the yellow metal’s prices.
The AUD/USD currency pair is trading at around 0.7561 down 0.18% on Wednesday as the market is digesting the FOMC’s minutes.
The Federal Reserve Bank said that it would 'soon be appropriate' to hike interest rates if the economic outlook remains intact. However, the report didn’t contain many hawkish surprises which suggested that the economy was at risk of overheating. In fact, the Fed said: "many saw little evidence of overheating of labor market with wage pressures still moderate.”
AUD is equally supported by the uptick in gold and US equities as the antipodean currency is positively correlated to those markets. The aus dollar exchange rate above 7555/65 is a buy signal and we topped exactly at the first target of 7600/05. Further gains target 7655/60 and strong resistance at 7685/90.
Try longs at 7575/65, with stops below 7530. Further losses likely to retest the low this week at 7500.
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