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\n Share:<\/span><\/p>\n The Australian Dollar (AUD) retraces its recent losses on Tuesday.\u00a0The AUD gained\u00a0ground against the US Dollar (USD) as the Reserve Bank of Australia (RBA) maintained its Official Cash Rate (OCR) at 4.35% at February’s meeting, as expected. However, the AUD\/USD pair weakened\u00a0due to hawkish comments from Federal Reserve (Fed) Chair Jerome Powell, coupled with the\u00a0reduced commodity prices.<\/p>\n Australian Bureau of Statistics released Retail Sales (QoQ) data on Tuesday, indicating an improvement with a 0.3% rise in the fourth quarter compared to the previous growth of 0.2%. The Australian economy is going through a cost-of-living crisis, there appears to be limited room for RBA<\/a> policymakers to raise interest rates further. Instead, the focal point now shifts to when the central bank might commence reducing interest rates. Investors will closely monitor RBA<\/a> Governor Michele Bullock’s upcoming speech on the monetary policy outlook, seeking additional insights into the central bank’s stance and potential future actions.<\/p>\n RBA Governor Michele Bullock stated, in a post-interest rate decision press conference, that the Reserve Bank of Australia is not ruling anything in or out regarding policy decisions. She emphasized that the bank perceives risks as balanced and is actively seeking data that confirms a return of inflation to the target level. Governor Bullock expressed the view that the central bank might be on a potentially narrow path to achieving the goal of bringing inflation back to the target. Additionally, she cited a 2.8% inflation forecast for the year 2025.<\/p>\n The US Dollar<\/a> Index (DXY) experienced a notable surge following the Federal Reserve’s hawkish stance, driven by robust ISM Services data for January. The ISM Services PMI exceeded expectations, registering at 53.4, surpassing both the consensus figure of 52.0 and the previous month’s 50.5. Additionally, the ISM Services Employment Index saw an improvement, rising to 50.5 from the previous reading of 43.8.<\/p>\n Federal Reserve Chairman Jerome Powell<\/a> contributed to the strengthening of the US Dollar by dampening expectations of a rate cut. Powell underscored the importance of monitoring inflation’s sustained movement toward the 2% core target. This stance led to an increase in US Treasury yields, putting downward pressure on the AUD\/USD pair.<\/p>\n The Australian Dollar traded\u00a0around 0.6490 on Tuesday, positioned below the resistance level of 0.6500. A potential breach above this level could serve as a catalyst for the AUD\/USD pair<\/a> to test the resistance zone near the major level at 0.6550. Subsequently, further upward movement may lead to encounters with the 23.6% Fibonacci<\/a> retracement level at 0.6563, ultimately reaching the 21-day Exponential Moving Average (EMA) at 0.6587. On the downside, immediate support is anticipated at the psychological level of 0.6450 following another psychological support level at 0.6400.<\/p>\n\n
Daily Digest Market Movers: Australian Dollar weakens on Fed’s hawkish stance<\/h2>\n
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Technical Analysis: Australian Dollar could test the psychological level of 0.6500<\/h2>\n
AUD\/USD: Daily Chart<\/h2>\n