AUD/USD Struggles as Bears Take Control Below 200-Day SMA
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AUD/USD Weakness Amid Mixed Inflation Data and US Data Dependence
The AUD/USD pair recently dipped to its lowest level since early August, hovering around the 0.6535 mark following the release of Australia's Q3 Consumer Price Index (CPI) report. Headline inflation eased more than expected, with quarterly growth slowing to 0.2%, down from the previous quarter’s 1.0%. This softer CPI has stirred speculation of a potential rate cut by the Reserve Bank of Australia (RBA), applying pressure on the Australian Dollar. However, core inflation remains above the RBA’s target, suggesting that an immediate rate cut is unlikely, offering some near-term support for the Aussie.
Focus Shifts to Key US Economic Data for Next Steps
With AUD/USD on track for its worst monthly performance in over a year, investors await upcoming US data, including the ADP private sector employment report and Q3 GDP. If US economic growth surpasses expectations, it could reinforce the Federal Reserve’s cautious approach to rate cuts, keeping US bond yields elevated. A positive GDP surprise may fuel demand for the US Dollar, adding pressure on AUD/USD. Traders will also monitor the US PCE Price Index and Nonfarm Payrolls data for further insights.
Technical Outlook: Bearish Momentum, Limited Upside Potential
From a technical perspective, the recent move below the 200-day Simple Moving Average (SMA) has emboldened bearish sentiment, although the Relative Strength Index (RSI) is nearing oversold territory. This calls for some consolidation or a slight bounce before resuming a downward trend. If the pair attempts a recovery, resistance will likely emerge around the 0.6600 mark, with the 200-day SMA near 0.6630 acting as a crucial pivot.
Conversely, if the AUD/USD breaks below the recent low of 0.6535, further declines could extend toward the 0.6500 psychological threshold, with subsequent support around the 0.6440-0.6435 zone. A continued downtrend may even push AUD/USD to the 0.6400 mark, setting the stage for the next move based on upcoming data.
The AUD/USD pair recently dipped to its lowest level since early August, hovering around the 0.6535 mark following the release of Australia's Q3 Consumer Price Index (CPI) report. Headline inflation eased more than expected, with quarterly growth slowing to 0.2%, down from the previous quarter’s 1.0%. This softer CPI has stirred speculation of a potential rate cut by the Reserve Bank of Australia (RBA), applying pressure on the Australian Dollar. However, core inflation remains above the RBA’s target, suggesting that an immediate rate cut is unlikely, offering some near-term support for the Aussie.
Focus Shifts to Key US Economic Data for Next Steps
With AUD/USD on track for its worst monthly performance in over a year, investors await upcoming US data, including the ADP private sector employment report and Q3 GDP. If US economic growth surpasses expectations, it could reinforce the Federal Reserve’s cautious approach to rate cuts, keeping US bond yields elevated. A positive GDP surprise may fuel demand for the US Dollar, adding pressure on AUD/USD. Traders will also monitor the US PCE Price Index and Nonfarm Payrolls data for further insights.
Technical Outlook: Bearish Momentum, Limited Upside Potential
From a technical perspective, the recent move below the 200-day Simple Moving Average (SMA) has emboldened bearish sentiment, although the Relative Strength Index (RSI) is nearing oversold territory. This calls for some consolidation or a slight bounce before resuming a downward trend. If the pair attempts a recovery, resistance will likely emerge around the 0.6600 mark, with the 200-day SMA near 0.6630 acting as a crucial pivot.
Conversely, if the AUD/USD breaks below the recent low of 0.6535, further declines could extend toward the 0.6500 psychological threshold, with subsequent support around the 0.6440-0.6435 zone. A continued downtrend may even push AUD/USD to the 0.6400 mark, setting the stage for the next move based on upcoming data.