- The AUD/USD gained ground as the Australian CPI revealed stronger-than-expected data.
- The US dollar remains weak ahead of a potential 25-bps cut in today’s FOMC meeting.
- Traders look ahead to commentary from US FOMC members and the Federal funds rate for further policy cues.
The AUD/USD forecast remains bullish, hitting a 3-week top after the upbeat data pared hopes for a dovsish RBA stance. This uptrend was shaped by Australia’s stronger-than-expected CPI. Meanwhile, the inflation data halted expectations of further easing from the Reserve Bank of Australia (RBA).
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According to the Australian Bureau of Statistics, the CPI climbed 1.3% QoQ in Q3. The figures exceeded the expected forecast of 1.1%, came at 0.7% higher in Q2. Annually, the CPI also exceeded the 3.0% expected forecast and stood at 3.2% YoY. The Australian CPI M/M witnessed a 3.5% YoY, shaped by increased housing and transport expenses.
The CPI readings have reduced the probability of RBA rate cuts amid persistent price pressure. Markets speculated that the RBA is more than likely to keep the 3.6% cash rate unchanged at the upcoming November 4 meeting.
In the US part, the greenback remained under pressure amid the FOMC interest rate meeting on Wednesday. Markets are expecting a 25-bps rate cut this week. Meanwhile, the ongoing US government shutdown and the political chaos further weaken demand for the US dollar.
AUD/USD Daily Key Events
The major events in the day include
- US Federal Funds Rate
- US Pending Home Sales m/m
- US FOMC Statement
- US FOMC Press Conference
On Wednesday, traders are eying the US FOMC rate decision and press conference. The widely expected rate cut could cap the dollar gains but policy statement will be more important to watch for the cues into December rate cut.
AUD/USD Technical Forecast: Bulls Dominating Above the Key MAs
The AUD/USD pair shows a bullish bias on Wednesday as it trades above the 0.6600 level. The price remains above the 200-period MA, suggesting buyers have reclaimed control. Meanwhile, the 50- and 100-period MA also support the upside momentum.
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The RSI is at 75, indicating that the buyers are dominating. However, it hints at potential overbought conditions, suggesting a short-term correction before further upside. A decisive break above 0.6600 could make room for 0.6640 and 0.6670. Conversely, a failure to hold above these levels could trigger a pullback.
Support Levels
- 0.6570
- 0.6525
- 0.6480
Resistance Levels
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