Aussie pair is trading high against greenback amid US dollar weakness and a brighter mood to refresh the multiday high the previous day.  Global market sentiment improved on Tuesday after the declining US housing number, Fed’s questioned tapping plans. The Reserve Bank of Australia (RBA) monetary policy meeting minutes and the easing of corona virus fears at home came as no surprise to Aussie.

Investors accepted the minutes of the Reserve Bank of Australia (RBA)’s latest monetary policy meeting. The RBA has reversed its position that there will be no interest rate hike before 2024, but the Fed expects the economy to return to a recovery path in December and reach pre-pandemic growth levels by mid-22. In addition, higher commodity prices supported the upside rally of the Australian dollar. In addition, New South Wales, Australia’s most populous state, removed the mask orders and allowed large groups inside and outside as the full vaccination rate reached 80%. The market ignores the Westpac leading index, which fell 0.02 in September on an annual basis.

Meanwhile Federal Reserve Governor Christopher Waller said on Tuesday that if inflation continues to rise at the current pace in the coming months without falling as expected, Federal Reserve policymakers will have to accept a “more serious policy response” next year. For now, Waller told the Stanford Institute for Economic Policy Research, the economy has seen the most recent corona virus waves, labor and other supply shortages will ease over time and “inflation will be temporary,” and inflation is moving toward the central bank’s 2% target next year.

According to a Reuters report, raising the central bank’s key policy interest rate to close to its current zero is “just a matter of time,” he said, with a view to synchronizing with most of his colleagues. The central bank’s most recent “dot plot” policy depicts rate-rise expectations from analysts, halving the central bank’s rate hikes by the end of next year, with the other half expected to be raised by the end of 2023. More time is needed for the economy to reach full employment, another part of the central bank’s dual mandate. To accommodate such action, the Waller Fed will began to reduce its $ 120 billion monthly asset purchases if necessary.

On Tuesday, he said the economy was ready for such a move, calling for it to start next month and finish by the middle of next year. In particular, the “mind-boggling” reduction in unemployment from the 14.8% pandemic to 4.8% now shows that the labor market is approaching pre-pandemic strength, especially after counting 2 million people who retired during the crisis, he said, and is unlikely to return. Most central bank policymakers agree with Waller that it is time for Taper soon, and it is widely expected that they will announce a decision when they meet in early November.

AUD/USD 4 Hour Chart:

Support: 0.7425 (S1), 0.7377 (S2), 0.7347 (S3).

Resistance: 0.7503 (R1), 0.7533 (R2), 0.7580 (R3).

Amidst these above catalysts the Aussie seems uptrend amid rising in commodity prices and the risk sentiment due to Fed Governor speech. We expect a bullish trend for AUD/USD.