AUD/USD advances firmly above 0.6700 ahead of Powell’s speech

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  • The US dollar remains lower against the Australian dollar.
  • Mixed US economic data was ignored by investors focused on the Fed’s Powell.
  • Inflation in Australia is falling, putting pressure on the Reserve Bank of Australia.

The Australian dollar (AUD) It is advancing strongly in the American session amid mixed sentiment sparked by investors preparing for Jerome Powell’s speech for reasons that could give a boost to risk assets or send the US dollar (USD) reeling and strengthening. After hitting a daily low of 0.6670, AUD/USD is trading at 0.6709, up 0.24% from its opening price.

Investors stayed on the sidelines due to Powell’s speech

Wall Street sentiment remains fragile. Investors are bracing for Powell after a series of Federal Reserve officials paved the way for moderating rate hikes and stressed the Fed would not be stopping anytime soon. Speculation about a Fed pivot led to a rally in US stocks, and the dollar weakened, as the US Dollar Index (DXY) fell from around 110,000 to 105,340.

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On the currency front, AUD/USD rallied after hitting a November low of 0.6272 and rose towards 0.6800. However, the failure to decisively conquer the latter figure exacerbated a pullback to 0.6600 before consolidating around 0.6600-0.6700.

Meanwhile, on the US economic agenda was ADP’s November job change report, showing that the impact of Fed tightening is finally making a dent in the labor market. The reading was 127,000 new jobs added to the economy, well below estimates. Later, the US Department of Commerce revealed that the US economy in the third quarter grew at a pace of 2.9%, up from 2.6% in its anticipated release, and surpassed the 0.6% contraction of the second quarter.

Softer-than-expected Australian CPI eased pressure on RBA

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In the Asian session, the Australian CPI for October rose 6.9% yoy, below forecasts of 7.6%. Other data, such as building permits for October, disappointed investors, falling 6% month-on-month below estimates.

Therefore, AUD/USD remains biased between neutral and bullish, but Jerome Powell’s speech could exert downward pressure if his comments are hawkish. Otherwise, the AUD is expected to continue rising if it recognizes the pace of rate hikes.

AUD/USD Key Technical Levels

AUD/USD

Overview
Last price today 0.6709
Today I change daily 0.0017
Today’s daily change in % 0.25
today’s daily opening 0.6688
Trends
daily SMA20 0.6612
daily SMA50 0.6487
daily SMA100 0.6687
daily SMA200 0.693
levels
previous daily high 0.6749
previous daily low 0.664
Previous Weekly High 0.6781
previous weekly low 0.6585
Previous Monthly High 0.6548
Previous monthly minimum 0.617
Daily Fibonacci of 38.2% 0.6707
Daily Fibonacci of 61.8% 0.6682
Daily Pivot Point S1 0.6636
Daily Pivot Point S2 0.6584
Daily Pivot Point S3 0.6527
Daily Pivot Point R1 0.6745
Daily Pivot Point R2 0.6801
Daily Pivot Point R3 0.6853

Source: Fx Street

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