AUD jumped on positive GDP

Latest news

• Australian GDP rose by 3.1%, exceeding analysts’ forecasts of 2.5%. Australia experiences a stronger-than-expected recovery due to a rebound of the labor market, rising wages, and soaring private capital expenditure. The Australian dollar climbed after the release, but then joined its peers in falling against the USD.
• Treasury yields edged up. As a result, the USD surged too on Wednesday, pressing gold down. Treasury yields retreated after the Fed’s comments that it’s watching the bond market volatility. Bond yields surge as investors believe that growth and inflation will hike this year, which may push the Fed to stop its support sooner than expected.
• “If interest rates start moving higher and quicker than expected, then there’s a chance there might be a more significant pullback in the market,” said Morgan Stanley. 
• Elsewhere, oil started the day on a positive footing after a three-day drop. OPEC+ will hold a meeting tomorrow, where it will decide whether to increase output or not. 

Technical analysis

EUR/USD bounced off the lower trend line and started moving up. However, its growth was stopped by the 200-period moving average of 1.2100. It may drop again to Monday’s low of 1.2035. If it crosses this low, the way down to the key psychological mark of 1.2000 will be clear. Resistance levels are 1.2100 and 1.2150. 

The 100-period moving average of 1.3940 constrained GBP/USD from further falling. But if it manages to break it, the way down to the next support of 1.3900 will be open. On the flip side, the move above Monday’s high of 1.4000 will push the price up to the next round number of 1.4050. 

In the long term, GBP/USD has been trading in an increasing expanding triangle pattern. Since it’s in the lower part of this triangle, we should expect the price to start rising soon. 

USD/JPY has been trading in a descending channel. However, the rally should stop soon as two indicators point to the soon reverse down. Firstly, the pair has almost touched the upper trend line. Secondly, the RSI indicator has almost crossed the 70.00 level, signaling the overbought zone. Therefore, we might expect the pullback down. Support levels are 106.50 and 106.00.

Follow US ADP at 15:15 MT time, ISM Services PMI at 17:00 MT time, and Crude Oil Inventories at 17:30 MT time!

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