Analysis of the Australian dollar against the US dollar, September 13, 2021
Fundamental side: The dollar index rose to 92.83 on Monday to extend last week’s gains, traders remain cautious and avoid riskier currencies amid rising coronavirus infections and uncertainty over the schedule for the Federal Reserve to roll back its accommodative policies, economic data to be released during the week will provide Including CPI and Retail Sales an update on the US economic recovery.
Technical side: On the 4-hour candlestick chart, the AUD/USD is facing the 0.7347/ 0.7343 demand area.
If the demand zone holds, the price is likely to gradually rise towards the 0.7409 . resistance
On the other hand, a possible breakout of the demand zone may lead to a decline towards the 0.7282 support level
Why is the pound falling against the dollar? Does it continue?
Sterling fell at the start of the week, retreating from last Friday’s one-week high against the US dollar, as investors await more data to assess the pace of the economic recovery after the shutdown and how quickly interest rates will rise.
Inflation and retail sales figures are due to be released on Wednesday and Friday, respectively. The Bank of England expects inflation to rise sharply this year, peaking at 4%. Therefore, a strong inflation reading should reinforce expectations that the BoE is ready to tighten monetary policy faster than the European Central Bank or the US Federal Reserve.
Why is the demand for sterling declining?
The announcement of a tax increase in the UK to fund health and social care spending had a negative impact on the pound earlier as it could theoretically ease pressure on the Bank of England to tighten monetary policy due to its potential to affect the speed of recovery.
According to the weekly futures data, speculators increased their short positions on sterling in the week ending September 7, indicating that the speculative market is likely to fall on sterling against the dollar since July 2020.
The most important technical levels
– GBPUSD is trading down since touching $1.3890 levels, which makes it the current resistance.
– The pair is testing the moving average 50 on the four-hour frame, and its decline below 1.3790 levels would open the door for more downside.
– The next support is at $1.3756, and breaking these levels confirms the scenario of a continuation of the decline towards levels of $1.3725.
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