AUD/USD Price Forecast: Next on the upside aligns 0.6700
- AUD/USD rapidly faded Wednesday’s decline and advanced past 0.6600.
- The US Dollar faced renewed selling pressure following Trump-led tops.
- China remains the big drag for the Aussie Dollar for the time being.
The US Dollar (USD) faced renewed downside pressure on Thursday, following the sharp advance witnessed after the US election saw Republican Donald Trump become the 47th US President.
In this environment, AUD/USD quickly regained composure and set aside the previous day’s intense sell-off, reclaiming the 0.6600 barrier and beyond along with the critical 200-day SMA at 0.6628.
In the meantime, the Aussie Dollar managed to shrug off disheartening prints from the Chinese trade balance results, showing that the economy is expected to keep struggling to recover in a sustainable fashion. On the other hand, a decent rebound in copper prices and iron ore prices contributed to the upside bias in AUD on Thursday.
On the policy front, the Reserve Bank of Australia (RBA) kept interest rates steady at 4.35% on Tuesday, as expected, and adopted a neutral tone. The RBA highlighted its watchfulness on inflation, which is gradually approaching its target range. Inflation is projected to reach the midpoint of the 2-3% target by late 2026, though growth forecasts were slightly lowered.
During her press conference, RBA Governor Michele Bullock struck a balanced tone, indicating that the board did not discuss immediate rate changes and suggesting that the current rate setting is appropriate for now. Markets are eyeing a possible rate cut in May 2025, with the RBA expected to be one of the last central banks among the G10 to consider easing.
In Australia’s latest inflation data, September’s CPI slowed to 2.1%, with annual inflation for Q3 at 2.8% and the trimmed mean CPI at 3.5% YoY. Looking forward, potential Federal Reserve (Fed) rate cuts could support AUD/USD, though concerns about China’s economic outlook may cap any substantial gains.
AUD/USD daily chart
AUD/USD short-term technical outlook
On the upward, AUD/USD should meet its first barrier at the interim 100-day and 55-day SMAs of 0.6690 and 0.6727, respectively, before the 2024 high of 0.6942 (September 30).
In case sellers regain the upper hand, the next contention emerges at the November low of 0.6511 (November 6), prior to the 2024 bottom of 0.6347 (August 5).
The four-hour chart reveals a quick resumption of the positive trend. That being stated, the initial resistance level is 0.6674, seconded by 0.6723, and finally 0.6758. The RSI improved past the 64 level.
(This story was corrected on November 7 at 16:53 GMT to say that RBA Governor's name is Michele Bullock, not Michelle.)
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Author
Pablo Piovano
FXStreet
Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.
