The AUD/USD exchange rate has experienced a decline over the past two days, retreating from this year’s peak of 0.7145 to its current level of 0.7035. The pair is expected to experience volatility this week as the Federal Reserve and the Reserve Bank of Australia publish the minutes from their recent meetings. The AUD/USD pair has experienced a pullback in recent days as market participants responded to the latest macroeconomic data from the United States. According to data, the economy added more than 130,000 jobs in January, resulting in a decrease in the unemployment rate to 4.3%.
Recent data indicated that inflation decreased to 2.4% in January, whereas the core CPI held steady at 2.5%. The data suggests that the Federal Reserve is poised to implement multiple interest rate cuts throughout the year. The forthcoming minutes from the latest meeting of the Reserve Bank of Australia will serve as a significant catalyst for the AUD/USD pair. The bank opted to increase interest rates by 0.25% to 3.85% during the most recent meeting, referencing the latest inflation report as the rationale behind this decision. Recent data indicated that the headline Consumer Price Index persisted in its upward trajectory in December, diverging further from the bank’s target of 2.0%.
The Federal Reserve is set to release the minutes from the most recent monetary policy meeting, during which officials opted to maintain interest rates at a range of 3.50% to 3.75%. The forthcoming minutes will offer insights into the actions taken by the two banks during their recent meetings, as well as indications of what to anticipate in the upcoming sessions. Analysts anticipate that the RBA will increase interest rates by 0.25% in the upcoming meeting, whereas the Federal Reserve is projected to implement one to three rate cuts this year. The daily timeframe chart indicates that the AUD/USD exchange rate reached a high of 0.7145 last week before pulling back to the current level of 0.7073. The asset has shifted beneath the Strong, Pivot, Reverse level indicated.
The Relative Strength Index has dipped below the overbought threshold of 70, while the two lines of the Percentage Price Oscillator are nearing a crossover. It continues to hold a position just above the 50-day Exponential Moving Average. Consequently, the pair is expected to decline further and approach the Major S&R pivot point at 0.6835. A breakthrough above the significant resistance level at 0.7145 will negate the bearish perspective and indicate potential for further gains.