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AUD/USD loses momentum after hitting five-month highs above 0.6800

  • US consumer inflation declined more than expected in November.
  • US Dollar Index slides to its lowest level since July 27.
  • The AUD/USD holds firm, maintaining important weekly gains.

During the American session, the AUD/USD pair rose to 0.6824, reaching its highest intraday level since July, driven by broad-based Dollar weakness. It is holding onto its weekly gains, remaining near 0.6800.

Mixed US data: inflation approaches Fed's target

The latest important US economic report for 2023 showed that the Core Personal Consumption Expenditure Price Index (Core PCE) rose 0.1% in November, below the market consensus of 0.2%. The headline PCE declined for the first time since 2020. Another report indicated a 5.5% increase in Durable Goods Orders in November, and the University of Michigan Consumer Sentiment Index rose in December to 69.7 from 69.4.

The market reaction to the US data was limited. The numbers continue to indicate a robust economy and inflation approaching the Federal Reserve's target. Following the data, easing expectations rose, while US Treasury yields remained relatively steady.

The US Dollar index (DXY) dropped to 101.42, the lowest level since July, boosting the AUD/USD to approach 0.6825. The Australian Dollar is holding above 0.6800, set for its second consecutive weekly gain, reaffirming the bullish outlook. However, risks remain as the US economic performance could lead to the Fed cutting interest rates after other central banks, including the Reserve Bank of Australia (RBA).

Technical outlook 

The AUD/USD remains within an ascending channel on the daily chart; however, it is nearing the upper limit, which could potentially limit the rally and prompt a period of consolidation. Conversely, a breakout above the upper limit at 0.6830 could trigger acceleration, targeting 0.6850.

In the event of a downward correction, initial support may be found around the 0.6770 area, followed by 0.6725. If it falls below 0.6600, the outlook would shift from bullish to neutral/bearish.

AUD/USD daily chart 

AUD/USD

Overview
Today last price0.6813
Today Daily Change0.0011
Today Daily Change %0.16
Today daily open0.6802
 
Trends
Daily SMA200.6642
Daily SMA500.6503
Daily SMA1000.6467
Daily SMA2000.6579
 
Levels
Previous Daily High0.6802
Previous Daily Low0.6724
Previous Weekly High0.6729
Previous Weekly Low0.654
Previous Monthly High0.6677
Previous Monthly Low0.6318
Daily Fibonacci 38.2%0.6772
Daily Fibonacci 61.8%0.6754
Daily Pivot Point S10.675
Daily Pivot Point S20.6698
Daily Pivot Point S30.6672
Daily Pivot Point R10.6828
Daily Pivot Point R20.6854
Daily Pivot Point R30.6906

Author

Matías Salord

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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