AUD/USD Forecast: Aussie rebounds but not out of the woods
AUD/USD Current Price: 0.6324
- RBA Bullock says inflation numbers did not surprise the central bank.
- Australian wholesale inflation data and Core PCE in the US are due on Friday.
- The AUD/USD reached its lowest level since November 2022 and subsequently rebounded.
The AUD/USD reached its lowest level in a year during the Asian session at 0.6269, but then rebounded, accelerating during American trading hours despite upbeat US economic data. The pair climbed back above 0.6300. Inflation data from Australia and the US is due on Friday.
Reserve Bank of Australia (RBA) Governor Michele Bullock stated on Thursday that they were not surprised by the consumer inflation data released on Wednesday. She did not provide clear clues of a change in the RBA's economic outlook. On Friday, more inflation data is expected from Australia, with the Producer Price Index for the third quarter.
If wholesale inflation surprises to the upside, the likelihood of a rate hike at the next RBA meeting on November 7 will likely rise above 50%, potentially offering a boost, albeit temporary, to the Australian dollar.
The rebound in AUD/USD was driven by weakness in the US Dollar across the board. Economic data from the US came in above expectations, with the economy expanding at an annualized rate of 4.9% during the third quarter, surpassing the expected 4.2%. However, the core Personal Consumption Expenditure (PCE) rose 2.4% during the quarter, slightly below the expected 2.5%. The monthly Core PCE data is due on Friday. Other reports released on Thursday showed Initial Claims rising to 210K, and Continuing Claims jumping to 1.79 million, the highest since May. The AUD/USD remains near year-to-date lows. The Australian currency needs improved market sentiment and a correction in the US Dollar to exhibit confidence for a stronger recovery.
AUD/USD short-term technical outlook
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The AUD/USD experienced a drop from its weekly highs at the 55-day Simple Moving Average (SMA) to 0.6269, reaching its lowest level since November of the previous year, within a short span of time. Prior to the Asian session, the pair is recovering after avoiding a daily close under 0.6285, which could set the stage for further losses. However, it remains within an overall bearish trend. To remove the bearish bias in the short term, the Australian Dollar needs a daily close above 0.6400.
Looking at the 4-hour chart ahead of the Asian session, the pair has encountered resistance around the 0.6340 area, which is an important level that could limit further upside. If the pair manages to break above this resistance, additional gains towards 0.6365 are likely. The price is likely to consolidate between 0.6340 and 0.6300 over the next hours.
Support levels: 0.6300 0.6280 0.6255
Resistance levels: 0.6340 0.6355 0.6390
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
