AUD/USD struggles for momentum after testing the 200-DMA

The AUD/USD fails to gain traction on Tuesday, drops below Monday’s high, and exchanges hands at 0.6550 after reaching a daily high of 0.6589 during the European session.

Aussie Dollar drops below 0.6560, despite RBA minutes striking a hawkish stance

A shift in market sentiment spurred the AUD/USD downfall even though the Reserve Bank of Australia (RBA) revealed its latest meeting minutes, which struck a hawkish tilt. In the minutes, the RBA stated the hike was intended to cushion the markets of a “larger monetary policy response” as inflation remains high.

On the US side, the housing market paints a gloomy economic outlook, despite voices suggesting a soft landing its at reach. US Existing Home Sales in October plunged -4.1%, came at 3.79 million, beneath September´s 3.95 million.

The US Federal Reserve recently released its last meeting minutes, which said that all participants voted to keep rates unchanged at the 5.25%-5.50% range and that upcoming meetings would be data-dependent. The minutes showed a neutral approach by Fed officials, as participants noted that further tightening would be appropriate, even though they acknowledged that inflation has moderated.

The market’s reaction to the FOMC’s minutes showed the AUD/USD standing at around the current level. The US Dollar Index (DXY), which tracks the performance of the buck against six rivals, stays in the green at 103.61, up 0.16%.

AUD/USD Price Analysis: Technical outlook

The AUD/USD daily chart portrays the pair as neutral-biased, and its rally was capped by strong resistance. Buyers were unable to crack the 200-day moving average (DMA) at 0.6588, exacerbating a pullback. If the major achieves a daily close below 0.6556, Monday’s daily close could open the door for further downside, with sellers eyeing 0.6500. On the flip side, if AUD/USD reclaims the 200-DMA, that could pave the way for testing 0.6600.