Bullish view
Buy the AUD/USD pair and set a take-profit 0.7300.
Add a stop-loss at 0.7000.
Timeline: 1-2 days.
Bearish view
Sell the AUD/USD pair and set a take-profit at 0.7000.
Add a stop-loss at 0.7300.
The AUD/USD exchange rate is hovering near its highest point since 2022 as the Australian dollar emerged as a safe-haven amid the ongoing war in Iran. It jumped to a high of 0.7187 on Tuesday and then pulled back slightly to the current 0.7137.
Odds of RBA Rate Hike Jump
The Australian dollar has held steady in the past few days as investors anticipated more rate hikes this week.
Data released on Thursday showed that Australia's inflation expectation rose to 5.2% in March, its highest level since July 2023. This was a big increase from 5.0% in February and 3.6% this time last year.
More data shows that country’s labor market has continued strengthening, with the number of job seekers in the country falling.
Therefore, analysts believe that the Reserve Bank of Australia (RBA) will decide to hike interest rates by 0.25% in its meeting next week. If this happens, it will be the second time the bank has hiked rates this year.
The most recent data showed that Australia's consumer inflation has continued rising in the past few months, with the headline and trimmed mean inflation remaining above the RBA’s 2% and 3% band.
Additionally, the Australian dollar has done well because it has emerged as a safe-haven amid the ongoing war. That’s because Australia relies less on crude oil from the Middle East. It mostly relies on oil from Malaysia and the United States.
The AUD/USD pair also reacted to the latest US consumer inflation report. Data showed that the headline Consumer Price Index (CPI) rose 2.4% in February, while core inflation rose 2.5%.
The next key catalyst for the pair will be the upcoming US jobless claims, housing starts, and building permits data. It will also release the latest personal consumption expenditure (PCE) report.
AUD/USD Technical Analysis
The daily timeframe chart shows that the AUD/USD pair has remained steady in the past few weeks. It was trading at 0.7140, a few points below the year-to-date high of 0.7187.
The pair has remained above the 50-day Exponential Moving Average (EMA). It has also formed a bullish flag pattern, which often leads to more upside.
The pair has also remained above the Ichimoku cloud and the Supertrend indicators. Therefore, the pair will likely continue rising as bulls target the next key psychological level at 0.7300.