ASX jumped ahead of 2022 Federal Budget, AUD/USD pulls back from five-month high
The Australian share market jumped ahead as the government’s budget plan unfolds for the upcoming financial year. AUD/USD pulls back after approaching a five-month high the previous day.
What to look out for in the 2022 budget?
Tackling the elevating rising cost and easing the pressure of living for Australians is expected to be a primary focus today. The government is reported to include cash payments and fuel tax cuts for the new financial year. From the macro side, Australia's government is anticipated to offer stimulus aid for the nation's economy and highlight the strong economic outlook to comfort stressed Australians as the next Federal election looms right around the corner.
What are the key implications for the market?
The budget may bring some short-term sweeteners to Australian families and individuals. However, it might do little to ease the prevailing inflation crisis in the nation. Even worse, the market is worrying that the new budget plan would cause more headaches for the central bank. An estimated 30 billion extra spending is expected to add to the formula to further squeeze consumer prices in the short term, including a tightening labour market, soaring petrol costs, and living expenses.
As such, the Reserve Bank of Australia will likely start the rate rising journey sooner and harder. Early this month, the market expected the RBA to lift the historically-low interest rate as early as June.
ASX technical
The Australian share market has continued to gain this week, with the index jumping up more than 8% from the March low. The price is now approaching the highest level reached since last October. The next target for the ASX 200 will be the December high around 7553, which, if broken through, will likely bring the index to its highest level in 2022.
Technically, support can refer to the ascending trend line connected from the March low, from which, we will look at the level around 7428 for the near term. The mid-term momentum for the Australian stocks seems to remain bull-biased, as all three key moving averages point to a positive outlook.
AUD/USD technical
AUD/USD pulled back from its five-month high this week due to the strength of the greenback. The pressure from the critical resistance level is likely to be another reason if looking from a technical point of view. Referring to the daily chart, the support level for the near-term retreat can be found at $0.7400, where the current 20-day moving average sits. Any rebound from this level can be viewed as continuing the bull-biased trend. However, a broken-through from $0.74 will breach the trend line shown in the weekly chart, suggesting a risk of momentum overturn might be on the cards
AUD/USD technical
Follow Hebe Chen on Twitter @BifeiChen
Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
