AUD/USD bounces off daily lows, as US inflation data dampens rate hike expectations

AUD/USD recovers from 0.6318 to trade around 0.6330s, up 0.22%.
US core PCE at 3.7% YoY, below August's data, with general inflation at 3.4%, in line with forecasts.
Australian inflation above 5%, increasing the likelihood of another RBA rate hike in the near term.

Christian Borjon Valencia FXStreet

AUD/USD bounces off daily lows reached at 0.6318 and aims higher, registering gains of 0.22%, after economic data from the United States (US), although showed prices remain elevated, failed to shift speculations for additional rate hikes. At the time of writing, the pair exchanges hands at around 0.6330s.

Pair gains ground despite elevated US prices and potential for further RBA rate hikes

Inflation data in the US, as shown by the US Bureau of Economic Analysis (BEA), revealed the core Personal Consumption Expenditures (PCE), which the Fed uses as the primary reference for gauging inflation, rose by 3.7% YoY, below August’s data aligned with estimates, while general inflation remained unchanged compared to August’s 3.4%, aligned with forecasts. Even though inflation has slowed, the PCE has shown signs of bottoming around 3.4-—3.5%, indicating that inflation remains stubbornly above the Fed’s 2% goal.

Recently, the University of Michigan (UoM) Consumer Sentiment on its final reading for October came at 63.8 above forecasts but deteriorated compared to August, while inflation expectations were upward revised from one year, from 3.8% to 4.2%. For the mid-term, inflation is expected at 3%, as foreseen.

On the Aussie front, the latest inflation report witnessed prices standing above 5%, increasing the odds for another rate hike by the Reserve Bank of Australia. The ASX RBA rate tracker projects a 47% chance for a 25-bps rate hike at the upcoming monetary policy meeting.

Notably: On the geopolitical front, AP reported that Israeli ground forces are expanding activity in Gaza, which could shift market sour, and weigh on the AUD/USD pair.

AUD/USD Price Analysis: Technical outlook

The daily chart portrays the AUD/USD formed a hammer, from which prices had bounced toward the current exchange rate. However, if buyers want to regain control, they must clear the 50-day moving average (DMA) at 0.6394, ahead of the 0.6400 figure. The next resistance would be the October 11 high of 0.6445, but it would remain shy of the latest cycle high of 0.6522. Conversely, if AUD/USD stays beneath 0.6400, that would keep the downtrend intact, and sellers could threaten to push prices past the current year-to-date (YTD) low of 0.6270. Next support emerges at 0.66200.

AUD/USD

Overview
Today last price	0.6338
Today Daily Change	0.0016
Today Daily Change %	0.25
Today daily open	0.6322

Trends
Daily SMA20	0.6353
Daily SMA50	0.6397
Daily SMA100	0.654
Daily SMA200	0.6641

Levels
Previous Daily High	0.6331
Previous Daily Low	0.627
Previous Weekly High	0.6393
Previous Weekly Low	0.6296
Previous Monthly High	0.6522
Previous Monthly Low	0.6332
Daily Fibonacci 38.2%	0.6307
Daily Fibonacci 61.8%	0.6293
Daily Pivot Point S1	0.6284
Daily Pivot Point S2	0.6247
Daily Pivot Point S3	0.6224
Daily Pivot Point R1	0.6345
Daily Pivot Point R2	0.6368
Daily Pivot Point R3	0.6405

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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