A range of intraday and two-month highs may be seen in the AUD/USD currency pair. A short-term support line acts as a barrier to future losses.

Australia’s risk and commodity-sensitive currency have been outperforming the US dollar recently due to improving risk appetite in US equities markets and stability in the broader commodity complex.

Australian dollars are currently trading at around 0.7150, down about 0.3 percent on the day. This is the first time since early February that the currency pair has traded above the 0.7060 level.

According to the US Q1 GDP figures released earlier in the day, higher imports and a slowdown in inventory buildup were to blame for a surprise drop in output.

In light of the Reserve Bank of Australia’s (RBA) possible interest rate rise next week, experts may find it more difficult to break below the 0.7000 level. The erratic Q1 2022 Australian CPI numbers released on Wednesday have shifted policy expectations to the right, making this change more hawkish.

According to the Fed’s goal range, interest rates should end the year at 2.5 percent. For now, it seems unlikely that the AUD/USD pair will fall below 0.7000, but if the RBA lives up to or exceeds expectations of hawkishness, that level might become key support.

Conclusion

This past week, the AUD/USD exchange rate dropped to a new multi-week low of 0.7263 before finishing the week slightly higher.