AUDUSD tests its 38.2% retracement target. Key level for both buyers and sellers.

The AUDUSD AUD/USD The AUD/USD is the currency pair encompassing the Australian dollar of the Commonwealth of Australia (symbol $, code AUD), and the dollar of the United States of America (symbol $, code USD). The pair’s rate indicates how many US dollars are needed in order to purchase one Australian dollar. For example, when the AUD/USD is trading at 0.7500, it means 1 Australian dollar is equivalent to 0.75 US dollars. The Australian dollar (AUD) is the world’s fifth most traded currency, whilst the US Dollar The AUD/USD is the currency pair encompassing the Australian dollar of the Commonwealth of Australia (symbol $, code AUD), and the dollar of the United States of America (symbol $, code USD). The pair’s rate indicates how many US dollars are needed in order to purchase one Australian dollar. For example, when the AUD/USD is trading at 0.7500, it means 1 Australian dollar is equivalent to 0.75 US dollars. The Australian dollar (AUD) is the world’s fifth most traded currency, whilst the US Dollar Read this Term has moved higher in trading today and is trading at the highest level since July 1.

The move higher has been able to extend above the high from yesterday at 0.6852 and also a swing area (see red numbered circles) between 0.6866 and 0.6874.

The next target comes in at the 38.2% retracement of the move down from the June 3 high at 0.72823, to the low reached just last week at 0.66809. That retracement level comes in at 0.69106. The high price just reached 0.69082, and found some risk focused sellers on the 1st test

Getting above that retracement level would increase the bullish bias for the pair. Stay below would keep the correction within the plain-vanilla variety. The retracement level represents a key level for both buyers and sellers. As a result, there should be some risk defining sellers leaning against the level on the first test at least with stops on further momentum above the level.

On a break higher, the next target swing area comes between 0.69489 and 0.6962. Above that is the 50% retracement at 0.69816. Stay below and watch the 0.6866 – 0.6874 area for close support. Move below that level and we could see a rotation back toward the high from yesterday near 0.6853.

Last night, the RBA meeting minutes showed that the

• Board remains committed to doing what is necessary to ensure that inflation in Australia returns to the target over time.
• Members agreed that further steps would need to be taken to normalise monetary conditions in Australia over the months ahead.
• Members noted that gauging the level of the neutral rate is challenging in practice because it cannot be directly observed
• Members considered the possibility of raising interest rates by 25 basis points or 50 basis points.
• Level of interest rates was still very low for an economy with a tight labour market and facing a period of higher inflation.
• Members discussed three points, first that current cash rate is well below the lower range of estimates for the nominal neutral rate
• Members viewed it as important that inflation expectations remained well anchored and that the period of higher inflation be temporary.

The comments helped to support the currency.

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/inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term