But back that time the pair showed the correction lower right after it touched the mentioned levels. Will it be the same this time? At first we need to look at the triggers behind the recent moves.
Last week stronger than expected consumer expectations coupled with broad based USD weakness helped Australian Dollar to gain. However, today USD keeps falling against major colleagues, except for AUD.
We need to go to fundamentals. Australian economy is very dependent on export with key trading partners. That’s why sharp appreciation of AUD may hurt the economy, as the produced goods and services may become less competitive in the world market.
And usually the Reserve Bank of Australia doesn’t like it. And usually it takes every opportunity to slow down the appreciation. And probably that’s the time to see all that, given 3 Australian policymakers are scheduled to speak during the week ahead.
If we see any dovish bias in their comments, it’s time to see AUD/USD , and the nearest target is at 0.7740.