AUDUSD attempts to retrace the decline from the previous week as it bounces back from a fresh yearly low, but the Reserve Bank of Australia (RBA) interest rate decision may produce headwinds for the exchange rate as the central bank is widely expected to retain the current policy.
Last week AUDUSD was sitting at 0.7158 and has since taken a small dive downwards to 0.6993. A drop of around 115 pips in only a matter of days. Will the Australian Dollar continue to weaken against the US Dollar? Or is this a turning point?
At the start of 2021, AUDUSD was priced at 0.7778, and as we mentioned above, a dive of 700 pips has allowed it to reach a fresh yearly low. However, this area seems to be a support point dating back to October 2020. Will it be strong enough? How will the RBA react? This upcoming rate decision could impact how AUDUSD will perform for the rest of the year and moving into 2022.
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