FxWirePro: AUD/USD extends rally to fresh 3-year high

• AUD/USD hit fresh 3-year higher  on Thursday  as growing expectations of a probable RBA rate hike continue to fuel bullish sentiment for Australian dollar .

• Markets expect the Reserve Bank of Australia to deliver a 25-basis-point rate hike next Tuesday after inflation surprised to the upside last quarter.

• A rate hike by the RBA next Tuesday would mark the first tightening move by a non-Japan G10 central bank in this easing cycle. .

•On the domestic front, Australia’s December-quarter trade data showed a stronger external outlook, with export prices rebounding and import prices rising unexpectedly, boosting terms of trade.

•Export prices jumped 3.2% q/q in Q4, reversing a 0.9% drop in Q3, while import prices rose 0.9% q/q, beating expectations for a 0.2% fall.

•  Immediate resistance is located at 0.7066(23.6%fib), any close above will push the pair towards 0.7100(Psychological level).

•  Support is seen at 0.6985(Jan 28th low) and break below could take the pair towards 0.6940(38.2%fib)

Recommendation: Good to buy around 0.7050 with stop loss of 0.6980, and target price of 0.7100