AUD/USD Forex Signal 17/03: Bullish After RBA Rate Hike

(MENAFN- Daily Forex) Bullish viewEURUSD Chart by TradingView

Buy the AUD/USD pair and set a take-profit at 0.7200. Add a stop-loss at 0.6970. Timeline: 1-2 days.

Bearish view

Sell the AUD/USD pair and set a take-profit at 0.6970. Add a stop-loss at 0.7200.

The AUD/USD exchange rate rose slightly after the Reserve Bank of Australia (RBA) delivered its second interest rate decision of the year. It rose to 0.7065 on Tuesday, up slightly from this month’s low of 0.6940.

RBA Hiked Interest Rates

The AUD/USD exchange rate rose after the RBA continued to diverge with other global central banks. It delivered its second interest rate hike of the year, with the rate coming in at 4.1% from the previous 3.85%.

The bank is concerned that inflation has become elevated in the past few months, with a recent report showing that the headline Consumer Price Index (CPI) rose 3.8% on an annualized basis.

The trimmed and weighted mean inflation remained at an elevated level, a trend that may continue rising as energy prices rise during the ongoing Iranian war.

Meanwhile, the AUD/USD pair rose as the US dollar softened, with the US dollar index fell to $98, down from the year-to-date high of $100.

The next main data to watch will be the upcoming pending home sales data from the United States and the ADP weekly job changes report.

These numbers will come a day before the Federal Reserve delivers its interest rate decision. Economists expect the bank to leave interest rates unchanged between 3.50% and 3.75%. A Polymarket poll places the odds of status quo at 100%.

The bank will cite the recent inflation numbers, which showed that the headline Consumer Price Index rose 2.4% in February, a figure that will continue rising now that the war has pushed energy prices higher/USD Technical Analysis

The daily timeframe chart shows that the AUD/USD exchange rate has done well in the past few months, moving from a low of 0.5915 in April last year to 0.7065 today.

It also rebounded as the RBA hiked interest rates to combat the elevated inflation in the country. The pair has remained slightly above the 50-day Exponential Moving Average (EMA) and the Supertrend indicator.

The pair has formed a bullish flag pattern, a common continuation sign in technical analysis. Therefore, the pair will likely continue rising as bulls target the year-to-date high of 0.7181, its highest point this year. A move above that level will point to more gains, potentially to the psychological level at 0.7200.

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