General analysis AUDUSD for 22.04.2022

Current dynamics

The AUD/USD is trading in a steady downtrend on Friday. The catalyst for the decline was yesterday's hawkish speeches by Fed and ECB officials. The comments forced investors to be more cautious towards currencies whis high beta-coefficient. The downturn in risk appetite has traditionally had a negative impact on the Pacific currencies.
The Australian dollar began to retreat from local highs in the second half of Thursday after a key European central bank official Luis de Guindos allowed for a rate hike in July. The unexpectedly bold rhetoric contributed to a rise in European Union bond yields. However, the main pressure on the pair was generated by the speech of the Head of the Fed. Jerome Powell made it clear that the US regulator will certainly raise the rate by 50 basis points in May. Powell also said that the Fed is ready to accelerate monetary policy tightening as inflation is more than three times above the 2% target. Therefore, the Fed did not rule out a scenario in which it could raise the rate by 75 basis points in its next meetings.
The speech from the Head of the US central bank lowered the likelihood of a monetary policy tightening in Australia in May. Some experts continue to believe that the Reserve Bank of Australia will raise interest rates by 0.1% at their next meeting. At the same time the Fed will do so more quickly, so further reductions in high-risk assets will continue in the medium term.
Today at 14:45 (GMT+2), attention should be paid to the release of US business activity statistics.

Support and resistance levels

On the 4-hour chart, the instrument is rapidly declining, breaking the Bollinger Bands moving average from top to bottom. The nearest support level is the indicator's lower boundary. The indicator is reversing downwards and the price range has widened, indicating a continuation of the downtrend. MACD histogram is in the negative zone, holding a sell signal. Stochastic has entered oversold area, a strong buy signal is expected within 1-2 days.

• Support levels: 0.7115, 0.7165, 0.7230, 0.7300.
• Resistance levels: 0.7390, 0.7435, 0.7480, 0.7525.

Trading scenarios

• Short positions should be opened at the current price with targets 0.7195, 0.7165 and a stop loss at 0.7405. Implementation period: 2-3 days.
• Long positions can be opened above the level of 0.7400 with a target of 0.7460 and a stop-loss at 0.7370. Implementation period: 1-3 days.