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UAE Presidents Foreign Policy Advisor: The UAE is exercising restraint and seeking a way out for Iran and the region.The UAE presidents foreign policy advisor said Irans accusations against the UAE are "part of its unwise and chaotic policy."On March 15, S&P Global Ratings affirmed Saudi Arabias sovereign credit rating, adding that despite disruptions, non-oil growth momentum and related non-oil revenues should help support the economy. S&P stated that Saudi Arabia should be able to withstand the impact of the current conflict with Iran. S&P noted that the country should be able to shift oil exports to the Red Sea, utilize its vast oil storage capacity, and increase oil production post-conflict. The Saudi government should also be able to adjust investment spending related to "Vision 2030," a strategic framework launched by the country in 2016.On March 15th, Matt Reed, Vice President of the geopolitical and energy consultancy Foreign Reports, stated that an attack on Kharg Island could trigger Iranian retaliation against Gulf oil-producing countries. He said, "Iran will retaliate in kind." The United States warned on Friday that if Iran continues to block the Strait of Hormuz, Kharg Islands oil facilities could become the next target. Reed warned that the longer the conflict continues, the harder it will be to find alternative energy supplies. "At least 10 million barrels of oil are trapped in the Gulf every day, plus more than 4 million barrels of refined petroleum products and tens of billions of cubic feet of liquefied natural gas, with no easy alternatives." The International Energy Agency has announced the largest emergency oil reserve release in history, with 32 member countries planning to release approximately 400 million barrels of oil. However, Reed believes this measure will have limited effect, stating, "By the time the oil gets to the market, it may be too little, too late." He described it as nothing more than a "band-aid."On March 15th, local time, the Iranian Islamic Revolutionary Guard Corps issued a statement saying that in the past 48 hours, the US and Israel had launched attacks on several civilian industrial facilities in Iran, resulting in the deaths of several workers. The statement said that after setbacks in its confrontation with Iran, the US and Israel have turned to attacking non-military industrial facilities. Iran warned that US companies in the region should withdraw from their facilities and urged nearby residents to stay away from industrial areas with US capital involvement to avoid potential attacks.

AUD/USD Price Analysis: Bull Flag Breakout Requires a Retest to Near 0.7550

Larissa Barlow

Apr 06, 2022 10:02

  • The Australian bulls have gained strength as the RSI (14) has moved into a bullish zone of 60.00-80.00.

  • A re-test of the bullish flag formation will present market participants with an opportunity to buy at a discount.

  • The advance of the 20- and 50-EMAs bolsters the upside filters.

 

The AUD/USD pair has seen a meteoric rise after breaching the April 4 high of 0.7557, which has pushed the pair north, with the asset printing a new nine-month high of 0.7662 on Wednesday. Aussie bulls have been optimistic since March's lows of 0.7165. The pair has broken out of its consolidation phase, which was contained inside the range 0.7455-0.7541.

 

On a four-hour chart, AUD/USD is producing a bullish flag pattern, which indicates sideways movement following a strong run to the north and indicates the possibility of a new impulsive wave if consolidation breaks out firmly. Typically, a consolidation period is characterized by the placement of bids by investors who did not participate in the early surge and by those investors who choose to enter an auction after a bullish bias develops.

 

The increasing 20- and 50-period Exponential Moving Averages (EMAs) at 0.7550 and 0.7514, respectively, amplify the upside filters.

 

Meanwhile, the Relative Strength Index RSI (14) has shifted from 40.00-60.00 to a bullish range of 60.00-80.00, indicating a firmer upward advance in the near term.

 

A retest of the bullish upper boundary flag at 0.7541 will attract large buys from investors, propelling the pair toward Wednesday's high of 0.7662, followed by the 11 June 2021 high of 0.7776.

 

The greenback bulls, on the other hand, can regain power if the asset falls below the March 29 low of 0.7455, dragging it towards the March 10 high of 0.7369. If the latter is breached, the asset will continue to fall towards the round level support at 0.7300.

Four-Hour AUD/USD Chart

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