AUD/USD Forecast: Poised to challenge a critical resistance level

AUD/USD Current Price: 0.7546

• The aussie outperformed its major counterparts, rallying against the greenback.
• The Reserve Bank of Australia will announce its decision on monetary policy on Tuesday.
• AUD/USD tested the 0.7555 resistance level and could break beyond it with the RBA.

The AUD/USD pair peaked at 0.7555, a fresh 2022 high and matching October 2021 monthly top. The aussie outperformed its major counterparts against the dollar, as most major pairs held within familiar levels, but AUD/USD added roughly 80 pips on a daily basis. The positive tone of Wall Street, despite mostly modest gains, could have helped the pair.

On the data front, Australia published March TD Securities Inflation, which rose 4% YoY from 3.5% in the previous month. The country will publish the March AIG Services PMI and the S&P Services PMI for the same month. Additionally, the Reserve Bank of Australia will announce its decision on monetary policy.

The central bank is widely anticipated to maintain the cash rate on hold at 0.1%. Overall, market players are expecting policymakers to maintain their cautious stance amid the Eastern Europe crisis and the upcoming Federal election in the country. Most analysts expect the central bank to start normalizing the monetary policy by August, although keeping in mind that the RBA will probably move slowly.

AUD/USD short-term technical outlook

The AUD/USD pair holds on to most of its Monday’s gains, trading around 0.7540 while heading into the Asian opening. The daily chart hints at further gains ahead as technical indicators resumed their advances near overbought readings. At the same time, the pair is developing above all of its moving averages, with the 20 SMA extending its advance above the longer ones.

The 4-hour chart shows that the pair is comfortable above a flat 20 SMA, while the longer ones advance below it. Technical indicators have partially lost their bullish strength but hold within positive levels, reflecting the absence of selling interest. A break through the 0.7555 level should lead to a steeper advance towards 0.7630.

Support levels: 0.7505 0.7465 0.7430

Resistance levels: 0.7555 0.7590 0.7630

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