AUD/USD appeared to be on track to test the yearly low (0.6829) after failing to break above the 50-week SMA (0.7243), but the exchange rate could consolidate in the near term as long that it is defending the June low (0.6850).
AUD/USD/Short Weekly Chart Pending: AUD/USD
Source: Trading View
As a result, AUD/USD could face range-bound conditions as the Reserve Bank of Australia (RBA) seeks to further normalize its monetary policy over the coming months. The exchange rate may attempt to retrace the decline from the June high (0.7283) as Governor Philip Lowe and Co. is “committed to doing what is necessary to ensure inflation in Australia returns to normal.” ‘goal over time’.
However, AUD/USD may finally follow the negative slope of the 50-week SMA (0.7243) as the Federal Reserve approves a restrictive policy. The exchange rate could continue to make 2020 ahead, with Chairman Jerome Powell & Co. predicting a steeper trajectory for the federal funds rate.
AUD/USD could consolidate in the short term as it defends the June low (0.6850), but the exchange rate could hit new yearly lows in the second half of 2022 as the FOMC is on the right track. way to propose a series of rate hikes of 75 basis points over the coming months.
AUD/JPY/Long Pending Weekly Chart: AUD/JPY
Source: Trading View
AUD/JPY is consolidating after trading at a new yearly high (96.88) in June, and the exchange rate may continue to appreciate in the second half of 2022 as the Bank of Japan (BoJ) sticks to the quantitative and qualitative easing program with controlling yield curve.
As a result, AUD/JPY may stage renewed attempts to test the May 2015 high (97.30) as the Reserve Bank of Australia (RBA) normalizes its monetary policy. A move above 70 in the Relative Strength Index (RSI) will likely be accompanied by a rise in the exchange rate, similar to the price action seen earlier this year.
However, the AUD/JPY may face a bigger correction if the RSI diverges with the price and fails to break into the overbought territory. Failure to defend the June low (91.97) could push the exchange rate down to the May low (87.30) as bullish momentum wanes.