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AUD/USD declines as US GDP surpasses forecasts, Australian inflation cools

  • The AUD/USD pair is currently trading at 0.6621, showing a decline of 0.39%.
  • The US economy's growth rate in Q3 was reported at 5.2%, surpassing the expected 5% and marking the fastest growth in nearly two years.
  • AUD/USD traders eye the release of US Core PCE figures, along with employment data.

The Australian Dollar (AUD) extended its earlier losses against the US Dollar (USD) on Wednesday after the US economy in the third quarter, grew at a faster pace than expected, suggesting the US Federal Reserve’s job is not done. That, along with a softer Australia’s inflation reading, weighed on the AUD/USD, which trades at 0.6621, down by 0.39%.

Australian Dollar falls against the US Dollar, though would remains bullish above 0.6600

The US Bureau of Economic Analysis (BEA) revealed the economy grew at 5.2% in Q3, exceeding forecasts of 5%, and the fastest rhythm in almost two years. The data showed that business investment picked up while household consumption eased, indicating that the services segment might slow down in the near term. Even though the reading was positive and sponsored a leg-down in the pair, consumers continued to feel the pain of higher interest rates.

Despite the data, investors had priced in more than 115 bps of rate cuts by the Fed in 2024. This is reflected by the fall in US Treasury bond yields, with the 10-year benchmark note sitting at 4.27%, its lowest level since September 14. In the meantime, the US Dollar Index (DXY) trades solid with gains of more than 0.15%, up at 102.93.

Over in Australia, the Consumer Price Index (CPI) for October dipped to 4.9% from 5.6% in October, sponsored by lower prices in goods, petrol, holiday and travel costs. Traders were expected CPI at 5.2%, which were caught off guard, sending the AUD/USD sliding, as investors expect a less hawkish Reserve Bank of Australia (RBA), which lifted rates 25 bps earlier this month, to 4.35%.

Ahead in the calendar, the US calendar will feature the Fed’s preferred gauge for inflation, the Core Personal Consumption Expenditures (PCE) price index, along with employment data on Thursday. The Aussie’s docket will feature Building Permits and Housing Credit data.

AUD/USD Price Analysis: Technical outlook

After reaching a four-month high, the AUD/USD forms a two-candlestick ‘dark cloud cover’ chart pattern, suggesting the pair could drop further. Although downside risks remain, sellers must drag prices below the 0.6600 figure and the 200-day moving average (DMA) at 0.6580. Once those levels are breached, the next demand area would be the 0.6500 mark. On the other hand, if buyers keep the exchange rate above 0.6600, that could set the stage for a rally toward 0.6700.

AUD/USD

Overview
Today last price0.6614
Today Daily Change-0.0031
Today Daily Change %-0.47
Today daily open0.6645
 
Trends
Daily SMA200.6491
Daily SMA500.6417
Daily SMA1000.6482
Daily SMA2000.6583
 
Levels
Previous Daily High0.6666
Previous Daily Low0.6596
Previous Weekly High0.6591
Previous Weekly Low0.6501
Previous Monthly High0.6445
Previous Monthly Low0.627
Daily Fibonacci 38.2%0.6639
Daily Fibonacci 61.8%0.6623
Daily Pivot Point S10.6606
Daily Pivot Point S20.6566
Daily Pivot Point S30.6536
Daily Pivot Point R10.6675
Daily Pivot Point R20.6705
Daily Pivot Point R30.6744

Author

Christian Borjon Valencia

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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