AUD/USD Current Price: 0.6369
- Australia's strong retail sales raise expectations of another rate hike from the RBA.
- US Dollar slides as risk sentiment improves.
- The AUD/USD rises above the 20-day SMA targets the 55-SMA.
The AUD/USD rose on Monday for their third consecutive trading day, extending its recovery from monthly lows. It peaked at 0.6385 and then pulled back modestly. It remains supported by tightening expectations from the Reserve Bank of Australia (RBA) and an improvement in risk sentiment on Monday that weakened the US Dollar.
Retail Sales data from Australia surprised to the upside in September, with a 0.9% increase, exceeding the expected 0.3% gain. August numbers were revised higher from 0.2% to 0.3%. This data supports the view of many analysts that the RBA will raise the key interest rate by 25 basis points at next week's meeting.
The increased expectation of tightening from the RBA has been boosting the Aussie during recent sessions, contributing to the rebound in AUD/USD and AUD/NZD, with the latter reaching its highest level since June, above 1.0900. On Tuesday, Private Sector Credit data is due, and on Friday, more Retail Sales data will be released with the quarterly report. Also relevant for the Aussie on Tuesday are the Chinese PMI figures, which are expected to show improvement with both sectors remaining in expansionary territory.
The US Dollar lost ground on Monday across the board amid an improvement in market sentiment, despite a modest increase in US Treasury yields ahead of the FOMC meeting. However, it's not all about the Fed, as market participants await critical employment data, including the ADP on Wednesday and the Nonfarm Payrolls on Friday. On Tuesday, the Employment Cost Index is due.
The Greenback is losing momentum but remains near monthly highs overall. Fundamentals favor the US Dollar, but the fact that market expectations do not anticipate further rate hikes from the Fed limits the upside.
AUD/USD short-term technical outlook
-638342844353701445.png)
The AUD/USD has risen above the 20-day Simple Moving Average (SMA) and is approaching the 55-day SMA, which acts as a dynamic resistance level at 0.6397. If the pair breaks and consolidates above this level, it would strengthen the Aussie's outlook. On the other hand, a daily close below 0.6280 would open the doors to further losses.
On the 4-hour chart, technical indicators point to potential further gains. However, the Relative Strength Index (RSI) is flattening slightly below 70, and Momentum is turning downwards. Nonetheless, the Moving Average Convergence Divergence (MACD) indicates more strength ahead. The immediate resistance stands around 0.6380, and a test of 0.6400 seems likely. The mentioned area has acted as a strong barrier that halted the upside movement over the past two weeks. The positive sentiment will remain intact if the price stays above 0.6335. A downside break would signal weakness and leave the pair vulnerable to a decline towards 0.6300.
Support levels: 0.6355 0.6330 0.6295 0.6280
Resistance levels: 0.6400 0.6445 0.6475
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
AUD/USD: Next on the downside comes 0.6500
Further gains in the US Dollar kept the price action in commodities and the risk complex depressed on Tuesday, motivating AUD/USD to come close to the rea of the November low near 0.6500.
EUR/USD pierces 1.06, finds lowest bids in a year
EUR/USD trimmed further into low the side on Tuesday, shedding another third of a percent. Fiber briefly tested below 1.0600 during the day’s market session, and the pair is poised for further losses after a rapid seven-week decline from multi-month highs set just above 1.1200 in September.
Gold struggles to retain the $2,600 mark
Following the early breakdown of the key $2,600 mark, prices of Gold now manages to regain some composure and reclaim the $2,600 level and beyond amidst the persistent move higher in the US Dollar and the rebound in US yields.
Ripple could rally 50% following renewed investor interest
Ripple's XRP rallied nearly 20% on Tuesday, defying the correction seen in Bitcoin and Ethereum as investors seem to be flocking toward the remittance-based token. XRP could rally nearly 50% if it sustains a firm close above the neckline resistance of an inverted head and shoulders pattern.
Five fundamentals: Fallout from the US election, inflation, and a timely speech from Powell stand out Premium
What a week – the US election lived up to their hype, at least when it comes to market volatility. There is no time to rest, with politics, geopolitics, and economic data promising more volatility ahead.
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.