Daily Price Outlook
* The AUD/USD has seen a significant surge as the cash rate target increased by 25 basis points to 3.85%, and the rate paid on Exchange Settlement balances rose to 3.75%.
* From a technical standpoint, the AUD/USD currency pair has broken through the 0.6664 resistance level, with the next target set at 0.6760, while a downward trendline provides support around 0.6705.
* The AUD/USD may experience a bearish correction until it reaches 0.6664; a close above this level signals an opportunity to open a long position, with stop-loss at 0.6620 and upside targets at 0.6760 or 0.6795.
The AUD/USD has experienced a significant surge, as the Board decided to raise the cash rate target by 25 basis points to 3.85 percent today. The rate paid on Exchange Settlement balances also increased by 25 basis points, reaching 3.75 percent.
Although inflation in Australia has surpassed its peak, it currently stands at 7 percent, which is still considerably high. It will take some time before inflation returns to the target range.
From a technical perspective, examining the four-hour timeframe, the AUD/USD currency pair has formed a significant bullish engulfing candle, breaking through the 0.6664 resistance level and now targeting the next level at 0.6760.
Simultaneously, a downward trendline is providing major support around the 0.6705 level. As a result, the AUD/USD may experience a bearish correction until it reaches 0.6664.
Closing above this level would signal an opportunity to open a long position in AUD/USD. Prior to that, a stop-loss should be placed around the 0.6620 level, while the upside targets could be around 0.6760 or 0.6795.
AUD/USD - Trade Idea
Entry Price – Buy Above 0.66751
Stop Loss – 0.66137
Take Profit – 0.67956
Risk to Reward – 1 : 2.5
Profit & Loss Per Standard Lot = +$1,200/ -$614
Profit & Loss Per Micro Lot = +$120/ -$61
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