AUD/USD Forecast: Rising odds of a break above 0.6400
|- The US Dollar experienced a modest slide after the Fed kept rates unchanged, in line with expectations.
- The Australian Dollar benefits from increased risk appetite.
- The AUD/USD is testing a critical resistance level, with further gains anticipated above 0.6400.
The AUD/USD maintained its gains following the FOMC meeting and traded near the 0.6400 area, supported by risk appetite and a decline in US bond yields.
The Federal Reserve kept interest rates unchanged, and Chair Jerome Powell provided no surprises. The central bank suggested that rates may have peaked, but if inflation rebounds, they could consider raising rates again. This reiterated stance had a limited impact on the markets, and the Fed remains data-dependent.
Key economic figures from the US were released on Wednesday. The ADP employment report showed an increase in private payrolls by 113,000, below the expected 150,000. However, the JOLTS Jobs Opening data exceeded market consensus at 9.55 million. The negative surprise came from the ISM Manufacturing PMI, which dropped to 46.7 in October, below the anticipated 49.
On Thursday, the US will report the weekly jobless claims and Q3 Unit Labor Costs, which are relevant considering the current stance of the Fed. On Friday, the Nonfarm Payrolls data will be released, which will also be significant.
The Australian Dollar rebounded on Wednesday due to increased risk appetite. Wall Street indices extended weekly gains. Trade data from Australia is due on Thursday. If risk appetite persists, the likelihood of breaking above 0.6400 would increase, with consolidation above that level becoming even more critical.
AUD/USD short-term technical outlook
On the daily chart, the AUD/USD has recorded its highest daily close in three weeks. It is testing levels above the 55-day Simple Moving Average (SMA) and the 0.6400 area. If consolidation above these levels occurs, it could indicate further gains, with the next significant area of resistance seen at the October high of 0.6445. However, a rejection around the current levels would keep the pair within the current range.
On the 4-hour chart, technical indicators suggest an upside bias, providing scope for further gains. These signals would be more significant if the Aussie remains above 0.6400. Immediate support stands at 0.6380, while a break below 0.6345 would negate the bullish bias.
Support levels: 0.6380 0.6345 0.6315
Resistance levels: 0.6430 0.6445 0.6465
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