The AUD/USD price continued its spectacular comeback after the relatively hawkish Reserve Bank of Australia (RBA) minutes. The pair spiked to a high of 0.6775, its highest point since July 27th.
Fed and RBA divergence?The AUD/USD pair rallied after the RBA published a hawkish statement on Tuesday. The minutes showed that officials considered delivering the second consecutive rate hike in its December meeting.However, the bank decided to leave rates unchanged as officials waited for more data, especially on inflation. They will now focus on the fourth-quarter inflation data, which will come out in January. Officials will also watch other economic numbers like jobs and manufacturing output.Still, they saw encouraging signs that inflation was falling. For one, consumer prices have moved into the negative zone in China, its biggest trading partner. The European Union also published negative inflation numbers for November.The RBA’s meeting differed from that of the United States, where officials left rates unchanged and signaled that it was done with rate increases. The dot plot also pointed to three rate cuts in 2024.Meanwhile, the pair rose as traders embraced a risk-on sentiment on Tuesday. US equities rose while the US dollar index (DXY) and the VIX index continued falling. The dollar index has already moved below $102 for the first time in months.There will be no economic data from the United States and Australia on Wednesday. Therefore, traders will continue to contend with the recent Fed and RBA decisions. They will also contend with the relatively low volume now that traders have started breaking for the Christmas holiday.
AUD/USD technical analysisOn the daily chart, we see that the AUD/USD pair has been in a strong uptrend in the past few weeks. It has moved above the key resistance point at 0.6692, its highest point on December 4th. The pair has moved above the 25-day and 50-day Exponential Moving Averages (EMA).Further, the MACD has continued rising while the Average Directional Index (ADX) has risen to over 30. The ADX is one of the best indicators that shows a trend’s strength. Therefore, the outlook for the pair is bullish, with the next point to watch being at 0.6800. The stop-loss of this trade will be at 0.6692. More By This Author:EUR/USD Forex Signal: Bearish Flag Pattern FormsForex Today: Yen Drops As Bank Of Japan Maintains Loose Policy GBP/USD Forex Signal: Brief Rebound Ahead Of UK Inflation Data