AUSSIE SPIKES TO MULTI-MONTH HIGH AFTER HAWKISH RBA
US futures and European stocks declined slightly after the latest warning on inflation by OECD. In a report, the organization said that inflation in rich countries jumped to the highest point in 30 years as energy and food prices rose. The annual rate of the 30 members of the organization rose to 7.7% in February from 1.7% in the same month last year. This was the highest it has been since 1990 and analysts expect that the situation will keep rising. The data was collected before energy prices popped because of Russia’s invasion of Ukraine. Therefore, the biggest worry among investors is on stagflation, a situation where inflation rises as economic growth stalls.
The Australian dollar rose sharply on Tuesday after the latest interest rate decision by the Reserve Bank of Australia (RBA). The bank decided to leave interest rates unchanged at 0.10%. It also said that it will continue monitoring inflation in the coming months. The biggest challenge, according to the RBA, is that wage growth has been a bit slow in the past few months. Therefore, the Aussie rose because analysts expect that the bank will start hiking interest rates in the next few months. Data published earlier revealed that the services PMI declined slightly to 55.6 while the construction index rose to 56.5.
Economic data published by Markit revealed that the services sector is doing significantly better than the manufacturing industry. In the European Union, the services PMI rose from 55.5 in February to 55.6 in March. The same trend happened in the UK, where the PMI rose from 60.5 to 62.5. The two numbers were better than what analysts were expecting. These numbers were in contrast with what the manufacturing PMI showed. The manufacturing sector has struggled because of the ongoing supply chain challenges.
AUDUSD
The AUDUSD pair continued its bullish trend as investors reacted to the latest RBA decision. The pair rose to a high of 0.7633, which was the highest point since June 2021. The pair managed to move above the important resistance level at 0.7545, which was the highest point since November 9th. It also rose above the 25-day moving average while the Relative Strength Index has moved above the overbought level. Therefore, the pair will likely keep rising in the coming days.
EURUSD
The EURUSD pair retreated slightly even after the strong Eurozone services PMI data. It moved to a low of 1.0965, which was the lowest level since March 26th. On the four-hour chart, the pair moved below the important support shown in red. It then dropped below the dots of the Parabolic SAR indicator while the Relative Strength Index has moved below the oversold level. Therefore, the pair will likely keep falling.
ETHUSD
The ETHUSD pair held steady and close to its highest level this month as demand for digital coins remained. It is trading at 3,550, which is above the short and long-term moving averages while the MACD and the RSI have formed neutral patterns. Therefore, the pair will likely remain in this range during the American session.
