General analysis AUDUSD for 13.12.2021

Current Dynamics

The key event of the week is the Fed meeting on monetary policy, which is scheduled for Friday. Market participants expect comments of the regulator on the timing of a complete withdrawal of QE. If the Fed says it will stop stimulus by the end of March, the U.S. dollar will strengthen against major currencies. In addition, many experts predict that the central bank may hold the first round of tightening of monetary policy in April.

Last week AUD/USD grew by 2.45%. The meeting of the Reserve Bank of Australia became the main growth driver. As expected, the RBA made no adjustments to its monetary policy and left the current parameters of asset purchases intact. At the same time, the head of the regulator said that the economic recovery is going well, and the new Omicron strain should not have a significant impact on the process. It is worth noting that the central bank did not give inflation forecasts, which gives the RBA an opportunity to revise monetary policy in favor of tightening in 2022.

In addition, Pacific currencies received support from China. Positive data on foreign trade, as well as Beijing's support for the construction sector during the crisis kept AUD/USD in the positive zone. Also worth noting is the growing interest in assets with a high beta coefficient.

No significant publications from either side are expected today. Tomorrow at 02:00 and 02:30 (GMT+2), Australia will publish reports on business confidence and primary housing market. At 15:30 (GMT+2) in the U.S., the producer price data is expected to be released.

Support and resistance levels

On the 4-hour chart the instrument is correcting at the bottom of the Bollinger Bands. The indicator is pointing sideways and the price range has contracted, indicating an intraday correction of the uptrend. The MACD histogram is holding a buy signal. Stochastic is approaching the oversold area from above, a signal to open buy positions may be formed during to 1-2 days.

• Support levels: 0.6995, 0.7040, 0.7090, 0.7125.
• Resistance levels: 0.7155, 0.7185, 0.7135, 07285.

Trading scenarios

• Long positions should be opened at the current price with a target of 0.7220 and a stop loss at 0.7085. Implementation period: 2-3 days.
• Short positions can be opened below the level of 0.7110 with a target of 0.7060 and a stop-loss at 0.7140. Implementation period: 1-3 days.