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AUD/USD declines as US GDP beats forecasts and Australian inflation cools

  • The AUD/USD pair is currently trading at 0.6621, down 0.39%.
  • The growth rate of the US economy in the third quarter was reported to be 5.2%, exceeding the 5% forecast and marking the fastest growth in almost two years.
  • The AUD/USD pair will keep an eye on the release of US core CPI numbers as well as employment data.

He Australian dollar (AUD) expanded its previous losses against the US dollar (USD) Wednesday after the US economy in the third quarter grew at a faster pace than expected, suggesting that the US Federal Reserve’s work is not over. This, along with weaker inflation figures in Australia, weighed on the AUD/USD pair, which is trading at 0.6621, down 0.39%.

The Australian Dollar falls against the US Dollar, although it would remain bullish above 0.6600.

The US Bureau of Economic Analysis (BEA) revealed that the economy grew 5.2% in the third quarter, exceeding forecasts of 5%, and the fastest pace in almost two years. The data showed that business investment picked up, while household consumption moderated, indicating that the services segment could slow down in the short term. Although the reading was positive and heralded a decline in the pair, consumers continued to feel the pain of rising interest rates.

Despite the data, investors had priced in more than 115 basis points of rate cuts by the Fed in 2024. This is reflected in the fall in US Treasury yields, with 10-year yields at 4.27%, its lowest level since September 14. Meanwhile, the Dollar Index (DXY) is trading with gains of more than 0.15% and stands at 102.93.

In Australia, the Consumer Price Index (CPI) for October fell to 4.9% from 5.6% in October, driven by falling prices for goods, petrol and the costs of holidays and travel. Traders were expecting a CPI of 5.2%, which caught AUD/USD off guard, as investors expect a less hawkish Reserve Bank of Australia (RBA), which raised rates by 25 basis points at the beginning of the month, to the 4.35%.

In the US, the core personal consumption price index (PCE), which is the Fed’s preferred inflation indicator, will be published along with Thursday’s employment data. Construction permits and housing credit will be published on the Australian dollar agenda.

AUD/USD Price Analysis: Technical Outlook

After hitting a four-month high, the AUD/USD pair forms a “dark cloud cover” two-candle chart pattern, suggesting that the pair could fall further. Although downside risks remain, sellers need to drag prices below the 0.6600 figure and the 200-day moving average (DMA) at 0.6580. Once these levels are surpassed, the next demand zone would be the 0.6500 signal. On the other hand, if buyers keep the exchange rate above 0.6600, the stage could be set for a recovery towards 0.6700.

AUD/USD

Overview
Latest price today 0.6614
Today Daily Change -0.0031
Today’s daily variation -0.47
Today’s daily opening 0.6645
Trends
daily SMA20 0.6491
daily SMA50 0.6417
SMA100 daily 0.6482
SMA200 daily 0.6583
Levels
Previous daily high 0.6666
Previous daily low 0.6596
Previous weekly high 0.6591
Previous weekly low 0.6501
Previous Monthly High 0.6445
Previous monthly low 0.627
Daily Fibonacci 38.2 0.6639
Fibonacci 61.8% daily 0.6623
Daily Pivot Point S1 0.6606
Daily Pivot Point S2 0.6566
Daily Pivot Point S3 0.6536
Daily Pivot Point R1 0.6675
Daily Pivot Point R2 0.6705
Daily Pivot Point R3 0.6744

Source: Fx Street

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