AUD/USD trades neutral at 0.6380 after the US Fed Beige Book release

AUD/USD traded in the 0.6360 - 0.6400 range on Wednesday.
USD gained momentum after ISM Service PMIs and the Fed’s Beige Book releases.
The odds of one last hike by the Fed are gaining more relevance.

Patricio Martín FXStreet

In Wednesday's session, the AUD/USD traded neutral but remained vulnerable below 0.6400. On the one hand, strong economic activity reports from the US strengthened the USD, while the AUD struggled to gain momentum after Tuesday's Reserve Bank of Australia (RBA) decision.

ISM Services PMI lived up to the expectations in August. The figure came in at 54.5, higher than the expected figure of 52.5 and above the previous 52.7. Regarding the Fed, Beige’s book, which reports on the US's current economic situation through interviews with key business contacts and economists gathered by each of the 12 Federal Reserve Districts, revealed that economic growth was “modest” and job growth “subdued” in July and August. However, it also stated that imbalances persisted with the availability of skilled workers and the number of applicants constrained.

Meanwhile, US bond yields jumped back to weekly highs and depicted that markets are gearing up for another Federal Reserve hike (Fed) hike, which would lift rates to 5.75%. According to the CME FedWatch tool, the odds of a 25 basis point (bps) increase in November rose above 40%, making the USD gain interest. It's worth highlighting that the Fed stated that it needs to see the economy “cooling” to end its tightening cycle, to strong economic figures fuel hawkish bets for the remainder of the year.

On the AUD’s side, it is struggling to gather momentum after the Reserve Bank of Australia (RBA) held interest steady at 4.10% on Tuesday, adopted a wait-and-see approach and didn’t commit to further hikes.

AUD/USD Levels to watch

The AUD/USD daily chart analysis points to a bearish outlook for the short term. The Relative Strength Index (RSI) is situated below its midline in negative territory, displaying a southward trajectory. Likewise, the Moving Average Convergence Divergence (MACD) reveals lower green bars, signifying a growing bearish momentum for the pair. Furthermore, the pair is below the 20,100 and 200-day Simple Moving Averages (SMAs), implying that the bears retain control on a broader scale.

Support levels:0.6360, 0.6350, 0.6330.

Resistance levels: 0.6400, 0.6440 (20-day SMA), 0.6470.

AUD/USD Daily Chart

AUD/USD

Overview
Today last price	0.6381
Today Daily Change	0.0002
Today Daily Change %	0.03
Today daily open	0.6379

Trends
Daily SMA20	0.6451
Daily SMA50	0.6596
Daily SMA100	0.6637
Daily SMA200	0.6719

Levels
Previous Daily High	0.6465
Previous Daily Low	0.6358
Previous Weekly High	0.6522
Previous Weekly Low	0.6401
Previous Monthly High	0.6724
Previous Monthly Low	0.6364
Daily Fibonacci 38.2%	0.6399
Daily Fibonacci 61.8%	0.6424
Daily Pivot Point S1	0.6336
Daily Pivot Point S2	0.6293
Daily Pivot Point S3	0.6229
Daily Pivot Point R1	0.6443
Daily Pivot Point R2	0.6507
Daily Pivot Point R3	0.655

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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