Australian Dollar Surges to Three-Week High on RBA Inflation Warnings

GBP/USD rallied to a three-week high on Wednesday, climbing nearly 0.5% during early Asian and European trading sessions, driven by hawkish signals from a Reserve Bank of Australia (RBA) official regarding deteriorating inflation expectations.

The pair broke through the key psychological level of 0.70 and surpassed an important Fibonacci retracement level at 0.7025 — the 38.2% retracement of the recent decline from 0.7237 to 0.6894. A sustained close above this threshold would strengthen the bullish case, potentially confirming a reversal pattern characterized by a double-bottom formation within the weekly cloud, suggesting the end of a broader downtrend.

Nevertheless, upward movement faces notable resistance ahead. The first hurdle lies at 0.7032 (100-day moving average), followed by 0.7046 (200-day moving average). Notably, these moving averages recently formed a bearish crossover, and only a decisive break above them could fuel further gains.

Positive momentum on the daily chart underpins the current move, though caution is advised as overbought conditions indicated by the stochastic oscillator may cap the ongoing four-day rally.

In the near term, the currency pair is likely to maintain an upward bias provided it holds above the 0.70 mark.

Resistance: 0.7032; 0.7046; 0.7065; 0.7075
Support: 0.7000; 0.6990; 0.6975; 0.6947

Source link