The Australian Dollar is flying higher versus the US Dollar and clears US$0.7145-55 and breaks into the US$0.7200 region after a relatively dovish U.S. Federal Reserve statement fuelled a pullback in the greenback from 103.60 to 102.50.
The U.S. Federal Reserve hiked interest rates by 50 basis points, a move not seen since Alan Greenspan was U.S. Fed chairman back in 2000.
U.S. Fed Chair Jerome Powell said 50-basis point increases “should be on the table at the next couple of meetings,” but added that a three-quarter point rise increase “is not something the committee is actively considering.”
Friday’s more closely watched Non-Farm Payrolls count from the Bureau of Labour Statistics is expected to show a growth of 400,000 jobs added for April and a decline in the unemployment rate to 3.5%.
Based on the technical assessment, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator is positive but close to the overbought zone, while the Moving Average Convergence Divergence (MACD) is gaining momentum to support a positive signal soon.
The ADX (trend) indicator indicates a ranging market.
With the topside area exceeded at US$0.7145-55 now puts a mild pullback in perspective, although we should not rule out a challenge of the US$0.7285-90 level. Reassess from there.