AUD/USD Price Analysis: Struggles to extend recovery as US Dollar recovers
|- AUD/USD faces pressure in extending recovery as the US Dollar rebounds.
- US Michigan Consumer Sentiment Index drops to 67.7 as investors worry about the economic outlook.
- AUD/USD recovers after discovering buying interest while re-testing the horizontal support plotted from 0.6365.
The AUD/USD pair retreats after failing to extend recovery above the immediate resistance of 0.6470 as the US Dollar resumes its upside journey after a mild correction in the early New York session. The Aussie asset fails to stretch recovery further despite robust China’s economic data.
China’s annual Industrial Production remained robust in August, rose by 4.5%, and Retail Sales expanded by 4.6%. Investors feel that one-time robust economic data is insufficient to warrant decent growth prospects. The Australian Dollar, being a proxy to the Chinese economy, is facing tough barriers.
The US Dollar Index remains inside the woods but is expected to renew its six-month high despite expectations of a steady interest rate decision by the Federal Reserve (Fed) next week.
Meanwhile, the US Michigan Consumer Sentiment Index (CSI) drops to 67.7 as investors worry about the economic outlook knowing that the Fed is expected to keep interest rates high long enough’ till inflation comes down to 2%.
AUD/USD recovers after discovering buying interest while re-testing the horizontal support plotted from August 17 low at 0.6365. The Aussie asset climbs above the 50-period Exponential Moving Average (EMA), which trades around 0.6433. Potential resistance is plotted from August 30 high at 0.6522.
The Relative Strength Index (RSI) (14) aims to shift into the bullish range of 60.00-80.00. An occurrence of the same will activate the upside momentum.
A decisive break above August 15 high around 0.6522 will drive the asset to August 9 high at 0.6571. Breach of the latter will drive the asset towards August 10 high at 0.6616.
On the flip side, fresh downside would appear if the Aussie asset will drop below August 17 low around 0.6360. This would expose the asset to the round-level support of 0.6300 followed by 03 November 2022 low at 0.6272.
AUD/USD two-hour chart
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