AUD/USD Forecast: Stable ahead of US CPI and FOMC

Matías Salord FXStreet

AUD/USD Current Price: 0.6567

A quiet start to a busy week that includes US CPI, FOMC, and Australian jobs.
The AUD/USD is consolidating near the 20-DMA.
Technical indicators offer no clear signs in the short term.

The AUD/USD remains steady around 0.6560 as the week begins, which includes an FOMC meeting and the Australian jobs report. Price action is expected to pick up. In the short-term, the bias is mixed, with the US Dollar Index up but below the recent high of 104.30.

Reserve Bank of Australia (RBA) Governor Michele Bullock will speak at the Australian Payment Network Summit in Sydney on Tuesday. In terms of economic data, the Westpac Consumer Confidence report is due, along with the National Australia Bank's Business Confidence survey. On Thursday, the Australian employment report will be released.

The US Dollar Index rose on Monday but remained below last week's highs. A modest increase in US yields supported the Greenback. However, gains were limited as equity prices on Wall Street were posting gains.

On Tuesday, the US Consumer Price Index (CPI) will be released, with a slowdown in the annual rate expected from 3.2% in October to 3.1% in November. These figures are unlikely to change the outcome of the FOMC meeting starting on Tuesday. The Fed is expected to keep rates unchanged.

AUD/USD short-term technical outlook

The AUD/USD is hovering around the 20-day Simple Moving Average (SMA) and the 200-day SMA. Technical indicators on the daily chart are not providing clear signals. Momentum is flat as it approaches the midpoint, while the Relative Strength Index (RSI) is moving south but also flattening. A daily close above 0.6600 would strengthen the short-term outlook for the Aussie, while a decline below 0.6540 could lead to a slide towards 0.6510 initially.

On the 4-hour chart, the price is below the 20-period SMA, but technical indicators are flat. There is no clear bias in the short-term, and the price is likely to continue to consolidate around the current level until the next catalyst. Ahead of the Asian session, if the AUD/USD rises above 0.6575, it could test 0.6600, while a drop below 0.6550 may lead to further weakness.

Support levels: 0.6550 0.6525 0.6485

Resistance levels: 0.6595 0.6625 0.6655

View Live Chart for the AUD/USD

(This story was corrected on December 11 at 19:12 GMT to say that the US Dollar Index rose on Monday. A previous version of the story said that the USD declined.)

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.

AUD/USD picks up bids above 0.7100 after RBA-speak

AUD/USD picks up bids above 0.7100 in the Asian session on Tuesday, following hawkish comments from RBA Assistant Governor Sarah Hunter and Governor Michele Bullock. However, escalating tensions in the Middle East and the Fed's hawkish outlook remain supportive of the bullish US Dollar undertone, which could limit the pair. The crucial Trump-Xi summit is later this week and remains in focus.

USD/JPY holds small gains near 157.50 as JPY intervention risks loom

USD/JPY posts modest gains while trading near 157.50 in the Asian session on Tuesday as intervention fears help limit losses for the Japanese Yen. However, the BoJ's dovish rate hike to a 31-year high keeps JPY bulls on the back foot. Meanwhile, the US Dollar retains a bullish undertone amid the Fed's hawkish outlook and escalating Middle East tensions, providing tailwinds for the pair.

Gold battles $4,300 amid hawkish Fed, Iran risks

Gold turns lower for the second consecutive day following a modest intraday uptick, challenging the $4,315 region, or a three-day low in the European session on Tuesday. The US Federal Reserve's hawkish outlook is seen as a key factor driving flows away from the non-yielding yellow metal.

Bitcoin pauses rally as profit-taking reaches yearly high

Bitcoin takes a breather, facing a pullback, trading below $85,500 on Tuesday after surging 6.7% the previous day. Strong institutional demand supports the bullish price action, with spot Bitcoin Exchange Traded Funds recording nearly $1 billion in inflows on Monday and Strategy adding 950 BTC to its treasury.

Energy and risk markets remain in the driver’s seat

US stock markets rallied up 2.26% (Nasdaq) yesterday with AI/tech names leading the advance. The Nasdaq even tested the all-time high reached early June. The likes of the S&P 500 and EuroStoxx50 recovered up to 1.5%. Positive risk vibes and lower energy prices supported consolidation on bond markets following the past month’s heavy losses. European yield curves bull steepened.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.