AUD/USD Current Price: 0.6387
- Australian inflation surged by more than anticipated in October, according to TD Securities Inflation.
- The Reserve Bank of Australia will announce its monetary policy decision on Tuesday.
- AUD/USD is technically bearish in the near term, but further slides depend on the RBA.
The AUD/USD pair trades in the 0.6380 price zone, falling on Monday for a third consecutive day. The Australian dollar was hit by Chinese figures, as the official NBS Manufacturing PMI fell to 49.2 in October, while the Non-Manufacturing PMI slid to 48.7, missing the market’s estimates and signaling a steep contraction in business activity.
Australian data added pressure on the pair as October TD Securities Inflation surged by 5.2% YoY, higher than the previous 5%. Private Sector Credit, in the meantime, increased a modest 0.7% MoM in September.
Finally, the sour tone of global equities maintained the pair on the losing side. Equities eased as global inflation figures show that aggressive quantitative tightening has done little to take price pressures down. Speaking of which, the Reserve Bank of Australia will announce its decision on monetary policy first thing Tuesday.
Governor Philip Lowe and co are anticipated to proceed with a modest 25 bps rate hike amid the risk of a recession, although a 50 bps is not completely out of the table. The Australian Consumer Price Index (CPI) rose by 1.8% in the third quarter of the year, while the annualized pace of inflation hit 7.3%. The Trimmed Mean CPI, which tends to soften the average prices´ increase, rose by 6.1% YoY, the highest reading since the series commenced two decades ago.
AUD/USD short-term technical outlook
The AUD/USD pair is hovering around the 38.2% retracement of its latest daily run measured between 0.6169, the year low, and 0.6521, at 0.6385. The daily chart shows that the pair is also above a mildly bearish 20 SMA, which stands a few pips below the daily low. The longer moving averages keep heading south far above the current level, maintaining the long-term bearish trend in place. In the meantime, the Momentum indicator remains flat above its 100 level, but the RSI indicator already turned south, now standing at around 47.
The pair is at risk of falling, according to the 4-hour chart, as the pair trades below bearish 20 and 100 SMAs, both converging with the immediate Fibonacci resistance at 0.6440. Technical indicators, in the meantime, consolidating within negative levels after a failed attempt to advance. The 61.8% retracement of the aforementioned rally provides relevant support at around 0.6305, with a break below it opening the door for a retest of the year low.
Support levels: 0.6345 0.6305 0.6270
Resistance levels: 0.6440 0.6495 0.6540
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD retreats from tops post-US PCE, back near 1.0540
The bearish sentiment in the US Dollar remains in place and supports EUR/USD's constructive outlook, keeping it in the 1.0540 region after the release of US inflation data, as measured by the PCE, on Wednesday.
GBP/USD recedes to 1.2640 on US PCE data
GBP/USD remains positively oriented in the 1.2640 zone as the Greenback experiences a marked pullback following the PCE inflation release.
Gold remains sidelined near $2,640 following US inflation prints
Gold remains on the positive foot near $2,640 per troy ounce, as US inflation data matched initial estimates in October, while US yields display a negative performance across the curve.
The clock is ticking for France
A French political problem is turning into a problem for financial markets. The budget deficit in France is 6% of GDP, if the planned reforms are not enacted, then the deficit could rise to 7% of GDP next year. This is the level when bond vigilantes start to sniff around.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.