Daily Price Outlook
The AUD/USD
The Yellow-Metal Prices Has Failed To Stop Its Losing Streak & Remained Well Offered Around the 1,812 Level Amid Powell’s Hawkish Comments
The gold price has been falling and has not yet shown any indications of reversing course. It is currently being offered at around the 1,812 level, which means that people are willing to sell gold at that price.However, the reason for this decline in gold prices is attributed to the recent comments made by Jerome Powell, the chairman of the Federal Reserve. His remarks were considered "hawkish," which means that he expressed a more aggressive stance on monetary policy to curb inflation.
This has caused investors to shift their focus towards other investments, such as stocks, which offer potentially higher returns. Furthermore, the US dollar's bullish bias, driven by Fed's hawkish stance, was seen as another key factor that put p=furthr pressure on the gold prices as the gold and the US dollar typically have a negative correlation. This means that when the value of the US dollar rises, the price of gold tends to fall, and when the value of the US dollar falls, the price of gold tends to rise.
US Dollar jumps on Powell
The broad-based U.S. dollar gained substantial support and reached a three-month high against a bucket of currencies on Wednesday, tracking a surge in Treasury yields after Federal Reserve Chair Jerome Powell suggested that interest rates were likely to climb faster than market forecasts.
Federal Reserve Chairman Jerome Powell recently stated that the previously released slew of strong economic statistics will most likely lead to higher interest rates than previously anticipated to combat inflation.
Market participants interpreted this as a hawkish stance on monetary policy. This led to increased expectations of a 50 basis point interest rate hike in March, as opposed to the previously predicted 25 basis point increase.
According to interest-rate futures monitored by CME Group, the market-implied probability of a 50 bps raise at the FOMC meeting in March jumped from around 30% to 50%.
Hence, the rise in the value of the US dollar had a significant negative impact on the price of gold. This is because gold and the US dollar typically have a negative correlation, meaning that when the value of the US dollar goes up, the price of gold goes down, and vice versa.
AUD/USD Price Chart - Source: Tradingview
AUD/USD Intraday Technical Levels
Support Resistance
0.6708 0.6762
0.6686 0.6792
0.6655 0.6815
Pivot Point: 0.6739
AUD/USD – Technical Outlook
The AUD/USD pair has been trading sideways recently, with its stability remaining below 0.6780. It is still moving within a bearish channel on the chart, supporting our view and targeting the next level of 0.6665.
The EMA50 is also supporting this bearish trend. However, if the pair manages to break above 0.6780, it could stop the current bearish correction and lead to an attempt to regain the primary bullish trend.
The expected trading range for today is between 0.6670 support and 0.6780 resistance.
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