AUD/USD Current Price: 0.6639
- The US Dollar tumbles as US Treasury yields slide further.
- Australia will release October consumer inflation data early on Wednesday.
- The AUD/USD remains bullish, although technical indicators show overbought readings.
The AUD/USD rose to 0.6665, reaching the highest level in three months, and then pulled back, finding support above 0.6630. The weaker US Dollar was the key driver behind the move. The focus now shifts to Australian inflation data.
Data released on Tuesday showed that retail sales in Australia dropped 0.2% in October, against expectations of a 0.1% increase. The annual rate slowed from 2% to 1.2%, the lowest since August 2021. Reserve Bank of Australia (RBA) Governor Michele Bullock warned that services inflation is sticky and that they have seen more modest price pressures than expected. Markets do not anticipate another hike at the next meetings.
Key information is due on Wednesday with the release of the Monthly Consumer Price Indexes. The annual rate is expected to decline from 5.6% to 5.2%. Also relevant will be the Reserve Bank of New Zealand's decision.
On Tuesday, the US Dollar retreated, exacerbating its current negative momentum after comments from Federal Reserve (Fed) Governor Christopher Waller, who stated that there is no reason to insist that interest rates need to remain high if inflation consistently declines. He was speaking about the future. A few minutes later, Fed's Michelle Bowman said she remains willing to support more rate hikes if progress on inflation stalls. On Wednesday, the US will report a new reading on Q3 growth, and the Fed will release the Beige Book.
Despite the numbers and comments, the US Dollar remains under pressure and is boosting the AUD/USD pair. The trend still prevails and could continue as long as Treasury yields keep moving lower and the market narrative points to the Fed being done raising rates.
AUD/USD short-term technical outlook
-638367945740661412.png)
The daily chart shows that the pair has pulled back a bit from the fresh highs. At the same time, the Relative Strength Index (RSI) is rising above 70, warning about overbought conditions. This could suggest a pause ahead before another leg higher. The bias remains to the upside, with the price above key Simple Moving Averages.
On the 4-hour chart, the pair is moving with a clear bullish bias. However, the Relative Strength Index is showing overbought readings and is turning south. Momentum is flattening, and the MACD offers no clear signals. A correction could take place towards the immediate support seen at 0.6625. Even if it extends to 0.6595, the trend will still be on track for fresh highs. On the contrary, if it rises back and stays above 0.6650, it will strengthen. Expect growing resistance near 0.6665.
Support levels: 0.6620 0.6595 0.6570
Resistance levels: 0.6645 0.6680 0.6720
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 stays cautious near 1.0850, as ECB rate decision looms
EUR/USD trades with caution near 1.0850 in the European session on Thursday. The recent US Dollar strength and a softer risk tone weigh on the pair. Meanwhile, the Euro remains vulnerable ahead of the ECB policy announcements.
GBP/USD treads water below 1.3000 amid cautious mood
GBP/USD consolidates Wednesday’s softer UK CPI-inspired fall below 1.3000. Bets for a BoE rate cut in November weigh on the pair amid the sustained US Dollar strength. Hopes for a less aggressive Fed policy easing favor the USD bulls ahead of the US Retail Sales data.
Gold price bulls retain control near record high, looks to US data for fresh impetus
Gold price prolongs its one-week-old uptrend for the third straight day and touches a fresh all-time peak, around the $2,685-2,686 region during the early European session on Thursday.
European Central Bank set to trim interest rates again as economic outlook worsens
The European Central Bank is expected to cut benchmark interest rates by 25 bps at the October policy meeting. ECB President Christine Lagarde’s presser will be closely scrutinized for fresh policy cues.
Another unconvincing policy briefing fails to inspire confidence
Chinese authorities are playing the long game, trying to keep investors focused on the bigger picture, multiple stimulus measures spread out over time, with a bit of subtle bid support from state-backed institutions.
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.