AUD/USD extends its losses after RBA’s decision and solid US ISM data

The AUD/USD prolonged its agony during the North American session after the Reserve Bank of Australia (RBA) kept interest rates unchanged, setting the Aussie Dollar (AUD) faith, spurring losses of more than 0.70%. The pair is trading at 0.6565 after diving from daily highs of 0.6621.

AUD/USD on the defensive after RBA’s decision, while US data boosts the Greenback

The Greenback (USD) remains on the offensive, while data from the United States (US) triggered volatility in the buck, as shown by the US Dollar Index (DXY), which seesawed in the last hour from around 103.57 to 103.91 to settle at about 103.83.

An early report by S&P Global revealed that Services and Composite PMIs rose as expected, with the latter standing at 50.7, unchanged compared to October’s data. Recently, the Institute for Supply Management (ISM) revealed that activity in Non-Manufacturing businesses rose from 51.8 a month ago to 52.7, exceeding projections of 52.

At the same time, the US Department of Labor revealed that Job Openings fell to 8.733 million in October, below the estimated 9.3 million and close to 600,000 less than September’s figures.

Given that the recently released data suggests the US economy remains resilient, traders shift towards the release of employment data, with the ADP Employment Change on Wednesday and Initial Jobless Claims on Thursday.

Following the data, traders had priced in 137 basis points of rate cuts by the Federal Reserve (Fed) for the following year.

Aside from this, the RBA decided to keep rates at 4.35%, in a decision perceived as a dovish hold, per the market’s reaction, despite the RBA’s language that “whether further tightening of monetary policy is required…” they will act. The central bank said they don’t have enough data, which means the next meeting in February 2024 would be a “live one.”

AUD/USD Price Analysis: Technical outlook

AUD/USD daily chart shows bulls encountered solid resistance at a downslope supply trendline, which capped the last leg-up from October 26 lows, which witnessed the pair hitting a high of 0.6690. Since then, the pair lost a step as sellers dragged prices below the 0.6600 figure, eyeing a daily close below the 200-day moving average (DMA) at 0.6578. In that outcome, further downside is expected, with the following demand area at 0.6523, the November 6 high, and a previous resistance area that turned support.