AUD/USD forecast: bullish trend intact after hawkish RBA minutes

The AUD/USD pair jumped to the lowest level since September 7 as investors reacted to the latest minutes by the Reserve Bank of Australia (RBA). The pair rose to a high of 0.7445, which was about 3.85% above the lowest level this year.

RBA minutes

The RBA conducted its monthly meeting early this month. In it, the bank decided to leave interest rates and its other pandemic response tools intact. The bank then published the minutes of the meeting on Tuesday morning.

The minutes sounded relatively hawkish. For example, they pointed that the rapid increase of vaccinations will see restrictions lifted sooner than expected. As a result, the bank now expects that the economy will return to pre-Delta path by the second half of the coming year. 

They cited timely data on mobility that showed that consumption had stabilised in late September. Also, the bank expects that consumer spending will also rise as more Australians spend the money they saved during the lockdown. Still, the bank hinted that it will increase its interest rate in 2024, saying:

“It will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. The central scenario for the economy is that this condition will not be met before 2024.”

The next key catalyst for the AUD/USD price will be the American building permits and housing starts data. The numbers are expected to show that building starts declined in September while housing starts rebounded in the same period. The US housing sector has been relatively strong because of low-interest rates and high savings during the pandemic.

AUD/USD forecast

The four-hour chart shows that the AUD/USD pair has been in a major bullish trend in the past few weeks. The rally accelerated when the price moved above the resistance at 0.7312. This price was along the neckline of the inverted head and shoulders pattern.

The pair has also moved above the 25-day and 50-day moving averages. Notably, it has also climbed above the resistance at 0.7440, which was the highest level this week. Therefore, the pair will likely keep rising as bulls target the September high of 0.7480.