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AUD/USD Elliott Wave Analysis: RBA and China Reopening are Good for Aussie Bulls

RBA surprised and hiked more than expected this week; they lift the interest rate to 0.85% from 0.35% during the latest meeting, but Aussie did not rally much. We have seen 60 point move before the pair slowed down, despite the fact that the board expects to take further steps in the process of normalizing monetary conditions in Australia over the months ahead. Decisions will depend on upcoming data.

Technically speaking Aussie is trying to wake up along with stocks, so seems like wave C is already in place, unless this is still a higher degree leg A from the 0.7661 highs. Well, at this stage it’s too early to confirm any new long-term bottom, but at least in the short-term, we should be aware of more upside after recently broken trendline resistance in the first leg, so more upside can be coming after pullback. Support is at 0.70/30 which can be also a base for a right shoulder. Some resistance is now at 0.7267 for end of the first leg.

Big picture

Ideally, the weakness from the start of April belongs to a higher degree of corrective set-back from 2021 highs which can stop this year around 0.6800 area especially as RBA sees a lot more rate increases in the months ahead. So at some point policy gap between RBA and FED will narrow which can be a catalyst for a bounce on Aussie in the second part of 2022. Bounce on stocks would also be very positive for the Aussie.

Elliott Wave Financial Service
Elliott Wave Financial Servicehttp://www.ew-forecast.com/
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