According to Reuters, market participants were waiting for a pause in a series of interest rate hikes, as the data showed a slowdown in inflation. However, the Reserve Bank of Australia on Tuesday raised the rate by 25 basis points.
"Inflation in Australia has passed its peak, but at 7 percent is still too high and it will be some time yet before it is back in the target range," said governor Philip Lowe.
As a result, the Australian dollar jumped by about 1% against major currencies. It's a tumultuous start to the week after May 1, which was a public holiday for the financial industry in many countries. Note that news from the Reserve Bank of New Zealand, as well as from the Fed, is expected tomorrow.
Meanwhile, the daily chart of AUDUSD shows a promising bullish pattern — a false bearish breakdown (1) of the lower border of the rising channel. In the most favorable scenario for the bulls, the rate may continue to rise towards a (3) year high, however (2) resistance at 0.678 is on the way — it will help to reveal how strong the demand in the AUDUSD market is.
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