Forex, short for Foreign Exchange, is when one currency is exchanged for another. The rate for a currency depends on its supply and demand, affecting how much a person pays to secure the other currency. People can exchange their respective currencies for trade, commerce, or tourism.
The market for Forex functions 24 hours from Monday to Friday, and banks and other approved financial institutions oversee it. Trading related to foreign exchange is done Over The Counter.
All Eyes On RBA Meeting Minutes
The Reserve Bank of Australia is expected to release its meeting minutes at 1:30 GMT. A lot depends on the minutes, with some of the best Australian forex brokers keeping a close watch on the publication.
There is a possibility that the hike forecast shift could make a small appearance in the minutes. Following this, the Australian Dollar would either gain more strength or inch towards weakness in the trading market.
Irrespective of what minutes hold in store, experts believe that a relatively more hawkish policy would still be irrelevant in lifting the spirits of AUD/USD.
Equity volatility and the rising geopolitical tensions due to the Russia Ukraine conflict are added to this claim.
In terms of figures, AUD/USD took a downturn to touch the mark of 61.8% Fibonacci retracement level along with the 50-day Simple Moving Average. Experts predict that a decline for a longer time could make way for the mark to go down to the 78.6% Fibonacci retracement level and the 100-day Simple Moving Average.
Trends signal that the least resistance looks to be on the lower side as there is a weakening foot for momentum oscillators while the MACD is on track to cross the centerline.
What is affecting AUD/USD the most appears to be the rising geopolitical tensions. Israel’s political instability has added to the concerns after a rocket was fired from the Gaza Strip. The military of Israel shot it down; however, the government led by Naftali Bennet has moved to the corner spot amid the threats during the rising political instability.
Meanwhile, Brent Oil prices have risen in the market courtesy of the halt of production in Libya’s El Feel, a part responsible for digging out 70,000 barrels of oil every day. Reports say that the halt is a part of production suspension largely motivated by the political scenario.
Gold prices have risen to 2,000 in the past 24 hours. The market observed a surge in the US natural gas as traders bid higher prices due to the stagnation of the inventory level.
Eyes are also on the Central Bank of Indonesia, which is all set to come out with the rate decision.