AUD/USD price Analysis: Volatility contracts amid Descending Triangle formation


  • AUD/USD jumps to near 0.6650 ahead of US core PCE Inflation data.
  • The US Dollar weakens as a downwardly revised Q1 GDP keeps hopes of the Fed cutting rates at least once this year on the table.
  • Australia’s hot CPI report for April pushes back RBA’s rate-cut prospects.

The AUD/USD pair climbs to near 0.6650 in Friday’s London session. The Aussie asset strengthens as the US Dollar weakens ahead of United States core Personal Consumption Expenditure Price Index (PCE) data for April, which will be published at 12:30 GMT.

The US core PCE Inflation will provide cues about when the Federal Reserve (Fed) will start reducing interest rates. Currently, financial markets are mixed about September’s policy meeting.

Economists expect that core PCE inflation rose steadily by 0.3% and 2.8% monthly and annually, respectively.

The US Dollar Index (DXY) seems vulnerable near day’s low around 104.65. The near-term outlook of the US Dollar turned uncertain after US Bureau of Economic Analysis (BEA) reported its second estimates report for Q1 Gross Domestic Product (GDP) that the economy expanded at a slower pace of 1.3% due to lower consumer spendings from the preliminary estimates of 1.6%.

Meanwhile, the Australian Dollar’s appeal is upbeat as hot monthly Consumer Price Index (CPI) data for April has forced traders to pare Reserve Bank of Australia’s (RBA) early rate-cut bets. Annually, price pressures rose at a higher pace of 3.6% than estimates of 3.5% and the former reading of 3.4%.

AUD/USD advances toward the downward-sloping border of the Descending Triangle chart pattern, which is plotted from May 16 high at 0.6714, formed on a daily timeframe. The horizontal support of the above-mentioned chart formation is marked from May 13 low at 0.6586.

Upward-sloping 20-day Exponential Moving Average (EMA) near 0.6620 suggests that the near-term trend is bullish.

The 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, indicating a sharp volatility contraction.

Going forward, a decisive move above May’s high at 0.6714 will drive the asset towards January 3 high at 0.6771 and the round-level resistance of 0.6800.

Alternatively, a downside move would appear if the major breaks below May 14 low at 0.6580, which will expose it to May 1 high at 0.6540, followed by the psychological support of 0.6500.

AUD/USD daily chart

AUD/USD

Overview
Today last price 0.6647
Today Daily Change 0.0014
Today Daily Change % 0.21
Today daily open 0.6633
 
Trends
Daily SMA20 0.6633
Daily SMA50 0.6561
Daily SMA100 0.6559
Daily SMA200 0.6535
 
Levels
Previous Daily High 0.6647
Previous Daily Low 0.6591
Previous Weekly High 0.6709
Previous Weekly Low 0.6592
Previous Monthly High 0.6644
Previous Monthly Low 0.6362
Daily Fibonacci 38.2% 0.6626
Daily Fibonacci 61.8% 0.6612
Daily Pivot Point S1 0.66
Daily Pivot Point S2 0.6567
Daily Pivot Point S3 0.6543
Daily Pivot Point R1 0.6657
Daily Pivot Point R2 0.668
Daily Pivot Point R3 0.6713

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD stays firm toward 0.6750 after Aussie jobs data

AUD/USD stays firm toward 0.6750 after Aussie jobs data

AUD/USD is holding firm while eyeing 0.6750 in Asian trading on Thursday, The pair draws support from mostly upbeat Australian employment data for June, which fan RAB rate hike bets. Meanwhile, the US Dollar remains depressed amid Fed rate cut bets, capping the pair's downside. 

AUD/USD News

USD/JPY extends rebound to 156.50 after suspected BoJ intervention-led drop

USD/JPY extends rebound to 156.50 after suspected BoJ intervention-led drop

USD/JPY is back above 156.50, having witnessed a sharp drop amid thin liquidity in the early Asian hours on Thursday. The pair finds support from a modest uptick in the US Dollar alongside the US Treasury bond yields, reversing the suspected BoJ intervention-led sell-off. 

USD/JPY News

Gold price trades with modest gains, remains close to all-time peak touched on Wednesday

Gold price trades with modest gains, remains close to all-time peak touched on Wednesday

Gold price attracts some dip-buying following the overnight pullback from the record high. Bets that the Fed will begin its rate-cutting cycle in September continue to act as a tailwind. A modest USD uptick, along with the risk-on environment, might cap further intraday gains.

Gold News

Worldcoin price sets for a rally following the breakout of the descending trendline

Worldcoin price sets for a rally following the breakout of the descending trendline

Worldcoin price faces a descending trendline on Thursday; a breakout signals a bullish move. On-chain data shows that WLD's daily active addresses are increasing, signaling greater blockchain usage. 

Read more

ECB preview: Incoming data since June unlikely to shift the policy view

ECB preview: Incoming data since June unlikely to shift the policy view

Since the last ECB meeting five weeks ago in June, only a limited amount of new economic data has become available, and this data is unlikely to have significantly changed the ECB's perspective on the economy and consequently its policy stance.

Read more

Forex MAJORS

Cryptocurrencies

Signatures