AUD - Fed hikes rates by 25 bps and signals imminent pause

Fed hikes rates by 25 basis points, signals imminent pause

The US Federal Reserve (FED) announced on Wednesday that it will raise interest rates by 25 basis points to 4.75%-5.00%, but hinted that further interest rate hikes will be suspended soon. Fed policymakers think one more rate hike this year may be all it takes to beat inflation, but ease policy next year less than most thought three months ago. The policy rate will hit 5.1% by the end of the year and the benchmark rate will hit 4.3% by the end of next year, according to median estimates in the Fed's latest quarterly economic forecast summary. Federal Reserve Chairman Jerome Powell began his post-meeting news conference by focusing on the recent banking crisis, trying to reassure savers, consumers and businesses that U.S. banks were safe after a series of actions by the Fed and other regulators over the past two weeks The system is robust. Powell said it would be appropriate to continue raising rates at this meeting, but he stopped saying continued rate hikes were appropriate.

The trend of AUD/USD can be seen from the technical chart. The MACD indicator has just broken the signal line, and the 5-day moving average has also risen above the 10-day moving average. It is expected that the short-term trend of the Australian dollar will remain stable. The exchange rate is temporarily limited below the 25-day moving average this week, and is currently at 0.6720. If it can break through this area again, it is expected to consolidate its upward trend. Based on the cumulative decline from the February high of 0.7158, the 38.2% rebound is at 0.6790, and the expansion to 50% and 61.8% is at 0.6860 and 0.6930. The key resistance level is to see the 0.70 points. For the support level, pay attention to the 0.6550 level that was guarded in the first half of this month, and then refer to 0.6380 and even the low of 0.6272 in November last year.

Estimated volatility:
Resistance 0.6720* - 0.6790 - 0.6860 – 0.6930 – 0.7000
Support 0.6550* - 0.6380 - 0.6272

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