• Stimulus and Upbeat Australian data underpins the bullish move of the quote – AUD/USD.
• RBA hawks favored by upbeat inflation and job report, braces the Aussie.
• Russia – Ukraine geopolitical tension weighs on market sentiment.

Australian dollar is trading high against the American dollar during Monday Asian session snapping the three-day downtrend near a multi-day low.

Stimulus and the upbeat Australian data are the majors catalysts in the uptrend of the Aussie pair ahead of the Australia’s central bank meeting on Tuesday morning.

Australia’s largest populated state made an announcement of relief measures for small and medium business owners. ANZ said “The NSW government announced on Sunday an AUD1bn package to support small and medium-sized businesses through the Omicron wave. Payments of up to AUD5,000/week for businesses with revenue between AUD75,000 and AUD50m will start on 1 February.”

Upbeat Australian data also underpins the bullish move of Aussie pair, Australia’s December month Private Sector Credit for December, up 0.8% MoM versus 0.5% forecast and 0.9% prior.

Market is expecting that the Reserve Bank of Australia (RBA) will end its bond buying campaign at its policy meeting on Tuesday and are wagering it could hike rates as soon as May given rising inflation and low unemployment.

Analysts at ANZ Bank said ‘We expect the RBA to forecast trimmed mean inflation of 3% by mid-2022 in Friday’s Statement on Monetary Policy, with unemployment falling below 4% by the end of year.”

”These numbers will be referenced in Tuesday’s RBA Board statement, though we expect the RBA Board to say it will wait until wages growth accelerates further before it lifts the cash rate.” ”Its forecast for wages growth will likely point to a rate hike in the first half of 2023 as being its central case, but Lowe is expected to admit for the first time, in Tuesday’s statement and/or his speech the following day, that a move in 2022 is a possibility if wages growth comes through faster than forecast.”

On the other hand, Russia – Ukraine geopolitical tension weighs on the market sentiment which could put a cap on the bullish move of the pair. “US senators are very close to reaching a deal on legislation to sanction Russia over its actions on Ukraine, including some measures that may take effect before any invasion, two leading senators said on Sunday,” said Reuters.

AUD/USD 4 Hour Chart:

Support: 0.6951 (S1), 0.6920 (S2), 0.6872 (S3).

Resistance: 0.7029 (R1), 0.7076 (R2), 0.7108 (R3).

Upbeat Australian data and RBA hawks favors the Aussie. We expect a bullish move for AUD/USD.