AUD/USD Current Price: 0.6971
- News that China resumed Australian coal imports underpinned the AUD.
- The US Dollar collapsed on speculation the US Federal Reserve would start hiking by 25 bps.
- AUD/USD retains its strong bullish momentum and is poised to keep rallying.
The Australian Dollar surged Thursday, trading against its American rival at around 0.6970. AUD/USD started the day on a strong footing, helped by news coming from China, as the country resumed Australian coal imports after banning them for almost three years. Additionally, the pair found support in upbeat Australian data, as the November Trade Balance posted a surplus of AUD 13.2 billion, beating expectations.
However, most gains were achieved after the release of the United States Consumer Price Index (CPI), which rose at an annual pace of 6.5% in December, further easing from multi-decade highs. Dwindling price pressures open the door for a slower Federal Reserve pace of tightening, something the market has been waiting for since the last quarter of 2022. Federal Reserve Bank of Philadelphia President Patrick Harker put the last nail in the US Dollar’s coffin, as right after the release of US data, he hit the wires hinting at 25 bps rate hikes for the upcoming meetings.
Wall Street seesawed between gains and losses but finally went for the upside, with the three major indexes posting substantial gains and adding support to AUD/USD. On Friday, Australia will publish November Home Loans and Investment Lending for Homes.
AUD/USD short-term technical outlook
The AUD/USD pair retains Thursday’s gains and is poised to extend its advance, according to technical readings in the daily chart. The pair rallied past before all of its moving averages, with the 20 SMA heading north but still trapped between the longer ones. Technical indicators, on the other hand, head north almost vertically, approaching overbought readings.
The 4-hour chart reflects buyers’ strength, as the pair dipped over 100 pips early in the US session but quickly trimmed such losses to reach a fresh daily high. At the same time, the Momentum indicator maintains its upward slope well above its midline while the RSI consolidates at around 68, skewing the risk to the upside. Finally, a bullish 20 SMA keeps leading the way higher, as slides below it quickly attract buying interest.
Support levels: 0.6960 0.6920 0.6880
Resistance levels: 0.6990 0.7030 0.7075
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 above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.