- AUD/USD is hovering below 0.6500 amid sheer strength in the USD Index.
- The Australian Dollar has witnessed selling pressure despite the higher-than-expected Australian CPI release.
- AUD/USD has been strongly dumped after testing the breakout region of the consolidation around 0.6560.
The AUD/USD pair has shifted its auction below the round-level support of 0.6500 in the Asian session. The Aussie asset has faced immense selling interest despite higher-than-anticipated monthly Australian inflation data.
Monthly Australian Consumer Price Index (CPI) (April) soared to 6.8% vs. the estimates of 6.4% and the former release of 6.3%. This could force the Reserve Bank of Australia (RBA) to continue hiking interest rates as the battle against stubborn inflation is getting more complicated.
The US Dollar Index (DXY) is struggling in extending its rally above 104.35, however, the upside seems favored as chances of one more interest rate hike by the Federal Reserve (Fed) are soaring. Meanwhile, Cleveland Federal Reserve Bank President, Loretta Mester, in an interview with Financial Times, cited “I don’t really see a compelling reason to pause — meaning wait until you get more evidence to decide what to do.”
AUD/USD has been strongly dumped by the market participants after testing the breakout region of the prolonged consolidation around 0.6560 on a daily scale. The consolidation formed in a wide range of 0.6562-0.6810 in which inventory adjustment took place.
Downward-sloping 10-period Exponential Moving Average (EMA) at 0.6558 indicates that the short-term bearish bias is extremely solid.
The Relative Strength Index (RSI) (14) is oscillating in the bearish range of 20.00-40.00, showing no signs of divergence and any evidence of an oversold situation, which advocates more weakness ahead.
Should the asset slips confidently below 0.6490, US Dollar bulls would drag the Aussie asset to 01 November 2022 high around 0.6464 followed by the round-level support at 0.6400.
In an alternate scenario, a recovery move above April 28 low at 0.6574 will drive the asset toward April 10 low at 0.6620 and May 19 high at 0.6675.
AUD/USD daily chart
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 clings to daily gains near 1.0300 after US PMI data
EUR/USD trades in positive territory at around 1.0300 on Friday. The pair breathes a sigh of relief as the US Dollar rally stalls, even as markets stay cautious amid geopolitical risks and Trump's tariff plans. US ISM PMI improved to 49.3 in December, beating expectations.
GBP/USD holds around 1.2400 as the mood improves
GBP/USD preserves its recovery momentum and trades around 1.2400 in the American session on Friday. A broad pullback in the US Dollar allows the pair to find some respite after losing over 1% on Thursday. A better mood limits US Dollar gains.
Gold retreats below $2,650 in quiet end to the week
Gold shed some ground on Friday after rising more than 1% on Thursday. The benchmark 10-year US Treasury bond yield trimmed pre-opening losses and stands at around 4.57%, undermining demand for the bright metal. Market players await next week's first-tier data.
Stellar bulls aim for double-digit rally ahead
Stellar extends its gains, trading above $0.45 on Friday after rallying more than 32% this week. On-chain data indicates further rally as XLM’s Open Interest and Total Value Locked rise. Additionally, the technical outlook suggests a rally continuation projection of further 40% gains.
Week ahead – US NFP to test the markets, Eurozone CPI data also in focus
King Dollar flexes its muscles ahead of Friday’s NFP. Eurozone flash CPI numbers awaited as euro bleeds. Canada’s jobs data to impact bets of a January BoC cut. Australia’s CPI and Japan’s wages also on tap.
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.