- AUD/USD rebounds from 0.6270 to 0.6316, with Aussie showing resilience against the Greenback.
- US GDP growth at 4.9%, and durable goods orders surge, setting the stage for a Fed rate hike.
- Inflation figures and RBA Governor's comments increase Australia's likelihood of a rate hike.
AUD/USD turns green in the day trades with gains of 0.17% after hitting a daily low of 0.6270, but upbeat growth data from the United States (US) bolstered the Greenback (USD), a headwind for the Aussie (AUD). Nevertheless, the Aussie’s (AUD) remained strong as the pair exchanges hands at 0.6316.
Aussie gains ground even as robust US data could prompt Fed tightening
The US Bureau of Economic Analysis (BEA) revealed the economy grew at the fastest pace in almost two years, as the third quarter Gross Domestic Product (GDP) exceeded the 4.3% projected, coming at 4.9%. Additionally, Durable Goods Orders for September surged by 4.7%, significantly exceeding the consensus forecast of 1.7%. Given the solid state of the economy, the US Federal Reserve (Fed) has the perfect excuse to raise rates, as the economy continues to grow above trend.
Other data witnessed the US Bureau of Labor Statistics (BLS) releasing the Initial Jobless Claims for the week ending October 21, which increased by 210,000. This figure was higher than both the forecasts and the previous week's numbers (208,000 and 200,000, respectively), indicating a potential loosening of the job market.
Aside from this, the latest inflation figures in Australia increased the odds for a hike by the Reserve Bank of Australia (RBA)¸ which has remained on hold, but with a data-dependent approach. The latest remarks by the RBA’s Governor Michelle Bullock have faded those assumptions, saying the Consumer Price Index (CPI) report was in line with policymakers' expectations, while they assess the chances that would warrant a rate hike.
Ahead of the week, the Aussie’s economic docket will feature the PPI for the third quarter. On the US front, the Fed’s preferred gauge for inflation, the Core PCE, will be revealed, along with the Consumer Sentiment of the University of Michigan.
AUD/USD Price Analysis: Technical outlook
The AUD/USD downtrend remains intact, even though it bottomed out at around the 0.6300 mark, as the 50 and 200-day moving averages (DMAs) remain bearishly orderly. For a bearish continuation, the pair needs to surpass the 0.6300 mark, followed by the current year-to-date (YTD) low of 0.6270. Once those two levels are breached, up next would be the October 21, 2022, low of 0.6210. On the other hand, if buyers want to regain control, they need to lift prices above the 50-DMA at 0.6395.
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