AUD/USD’s rally from 0.6210 stalls below 0.6380
21.10.2022, 18:33

AUD/USD’s rally from 0.6210 stalls below 0.6380

  • The aussie bounces up from 0.6210 and erases the previous two days' losses.
  • Fed speculation and BoJ intervention hit the USD.
  • AUD/USD is expected to remain capped below 0.6390.

The Australian dollar has featured a strong recovery on Friday’s US trading session. The pair bounced up from session lows at 0.6210, rallying all the way to levels right below 0.6380 and retracing the last two day’s decline.

The USD dives on Fed speculation and BoJ intervention

A news report by the Wall Street Journal suggested earlier on Friday that Federal Reserve officials are open to discussing how to signal a smaller rate hike in December which has hurt demand on the USD across the board.

The report has offset the impact of the hawkish rhetoric of Fed members. Just on Thursday, the Philadelphia Fed President Patrick Harker assured that the bank will "keep raising rates for a while."

Furthermore, an alleged intervention by the Bank of Japan and the Japanese Finance Ministry has pushed the yen higher across the board. The USD has tumbled more than 2.5% in a matter of minutes, which has hit all US dollar crosses.

AUD/USD unlikely to appreciate past 0.6390 in the near term – UOB

From a longer-term perspective, FX analysts at UOB remain skeptical about the possibility of a sustained uptrend: “Our latest narrative from Tuesday (18 Oct, spot at 0.6295) still stands. As highlighted, AUD is likely to consolidate and trade between 0.6190 and 0.6390 for the time being.”

Technical levels to watch

 

 

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