Yesterday, FOMC Minutes showed that, though a rise in the US interest rates is still possible, some Fed officials believe it is still not the right time for this decision.
Despite strong labour market statistics, Australia is facing a slowdown in its economic growth, a decline in investment and nearly zero inflation growth. Thus, the RBA may cut its interest rates at the upcoming meeting.
In the medium term, the AUD/USD pair will be under pressure due to the difference between Fed and RBA monetary policies.
Support and resistance
Today, the AUD/USD pair has broken out the resistance level of 0.7150 (EMA200 on the 4-hour chart and EMA50 on the daily chart) and continues growing to 0.7200. OsMA and Stochastic indicators on the 4-hour and daily charts recommend long positions, thus, un upward correction may reach the level of 0.7370 (EMA144 on the daily chart).
Nevertheless, a downward trend in the pair is still strong. After the breakdown of the level of 0.7030 (November lows and the lower border of an upward channel on the daily chart), the price is likely to resume its decline.
Support levels: 0.7150, 0.7100, 0.7030, 0.6950, 0.6910.
Resistance levels: 0.7200, 0.7325, 0.7370, 0.7500.
Long positions can be opened above the level of 0.7190 with targets at 0.7240, 0.7270 and stop-loss at 0.7140.
Short positions can be opened below the level of 0.7120 with targets at 0.7080, 0.7030 and stop-loss at 0.7150.