AUD/USD Current Price: 0.6554
- The Reserve Bank of Australia kept the interest rate unchanged as expected.
- Australia will release Q3 GDP data on Wednesday, alongside the US ADP report.
- The AUD/USD maintains a strong bearish bias in the short term.
The AUD/USD dropped for the second consecutive day, falling below 0.6600. This decline was influenced by a stronger US Dollar and a weaker Australian Dollar following the Reserve Bank of Australia (RBA) meeting. US data came in mixed but did not significantly impact the Greenback despite lower US yields.
As expected, the RBA left the key interest rate unchanged at 4.35%. In their statement, the central bank maintained a cautious stance and reiterated its data dependence. Market saw a slightly dovish bias after Governor Lowe's comment stating that data since the November meeting "has been broadly in line with expectations." The Australian Dollar lost momentum following the decision. Australia is expected to report slower growth data for the third quarter on Wednesday, with an annual rate projected to decrease from 2.1% to 1.8%. The market does not anticipate the RBA to raise rates and is now looking at potential rate cuts in the second half of 2024.
After the RBA meeting, the AUD/USD continued to decline, following the release of mixed US data and a deterioration in market sentiment. The Job Openings number came in below expectations, while the ISM Services PMI rose to 52.7 in November, surpassing the anticipated 52. US yields dropped following the data, but the US Dollar remained strong. On Wednesday, more employment data is due from the US with the ADP report, ahead of the weekly Jobless Claims on Thursday and Friday's Nonfarm Payrolls (NFP) release.
AUD/USD short-term technical outlook
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The AUD/USD dropped for the second consecutive day, falling below 0.6600 and also below the 200-day Simple Moving Average (SMA). Technical indicators still suggest the potential for further losses in the short term. The next strong support levels emerge around 0.6520 and 0.6530, which form a confluence zone of previous support/resistance levels and the 20-day SMA. A significant decline below this could indicate a further deterioration in the daily chart. A daily close above 0.6600 could point to a resurgence of bullish sentiment.
Ahead of the Asian session, the pair remains within a bearish short-term channel, with the upper limit seen around 0.6580. A break above that level would alleviate the bearish pressure. However, below that area, further losses seem likely. The 4-hour chart shows the Relative Strength Index (RSI) in oversold territory but does not provide clear signs of a rebound. Currently, the path of least resistance remains to the downside, with any corrections likely to face a strong barrier around 0.6600.
Support levels: 0.6545 0.6530 0.6510
Resistance levels: 0.6585 0.6610 0.6640
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