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The AUD/USD currency pair reached its pinnacle at 0.6378. Marking a six-month high, before undergoing a modest retracement during the American trading session, settling at approximately 0.6350. This retracement was driven by the vigor displayed by the US Dollar. Despite the underwhelming response in the market to the Australian PMI figures, market participants have since shifted their attention toward forthcoming inflation data.
Data released on Tuesday unveiled a contraction in Australian PMIs. And with the Services index diminishing from 51.8 in September to 47.8 in October. Also the Manufacturing index decreasing from 48.7 to 48. However, these figures failed to induce significant market reactions. Later in the trading day, Reserve Bank of Australia (RBA) Governor Michele Bullock underscored the central bank’s readiness to further elevate the cash rate in the event of a substantial upward revision in the inflation outlook. Her remarks contributed to fortifying the position of the Australian Dollar within the market.
Upcoming Economic Data’s Impact on AUD/USD Currency and Market Resilience
In the near term, key economic indicators like the Monthly Consumer Price Index (CPI) and related quarterly data will significantly impact the November 7 RBA meeting. While no interest rate adjustments are expected, a surprising rise in inflation data could increase the likelihood of a rate hike before the end of the year. The Monthly CPI is projected to increase from 5.2% in August to 5.4% in September. The Australian Dollar showed strength within the AUD/USD currency pair, aided by improved risk sentiment and steady Treasury yields, despite better-than-expected US PMI figures. The Composite Index rose from 50.2 to 51, its highest point in three months.
Also Read: Australian Stocks Dip 0.04% in S&P/ASX 200 Close
Technical Analysis: AUD/USD’s Path to Recovery
In European markets, the AUD/USD currency pair initially rose to 0.6379 but then retreated below the 20-day Simple Moving Average (SMA). Currently, the price lingers around this SMA, with daily chart technical indicators cautiously suggesting an upward trend. However, the overall trend remains bearish. To establish a more robust path to recovery, a daily close above the 55-day SMA at 0.6410 is essential.
On the 4-hour chart, the price is slightly above the 20 and 55-SMAs, with technical indicators favoring a bullish sentiment. The pair faces a short-term downtrend line at 0.6375; breaking this barrier would target around 0.6395. Bullish sentiment should prevail as long as the price remains above 0.6340, but dropping below this level would weaken the short-term outlook. Immediate support is evident at 0.6320, followed by 0.6295, before reaching a crucial support zone at 0.6285.
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Disclaimer:
Please note that this article serves solely for informational purposes. As such, it is not financial advice. We strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.
