AUD/USD – H1
Mr Powell provided some rather aggressive commentary yesterday, adding to the central bank's increasingly hawkish stance as of late. The Fed Chair hinted at an earlier conclusion of the Quantitative Easing program (QE) and also said that it is probably a good time to retire the term "transitory" in regards to high inflation. 
This pushed the pair to its lowest level since November 2020 (0.7061), but it was able to react quickly and today it moves to the offensive as sentiment improves. It registers gains of around 0.5% and reclaims its EMA100. A break above 0.7177 (23.6% Fibonacci of the October High/November Low drop) can lead to further correction towards mid-0.7200s.
Despite today's noteworthy recovery, AUD/USD remains in precarious position. So far it is unable to stray away from its EMA100 and the policy divergence between the Fed and the RBA does help, while the Omicron risks can weigh again on it. As such, there is still high risk for renewed downward pressure, although chances for a break below 0.7052 seem to have diminished in the short term.
Market participants await new Powell testimony later in the day, US PMIs and will also be on the lookout for any news around the 2-day OPEC/OPEC+ meetings that started today.
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Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.