- AUD/USD extended its rally to three straight days, although Australian inflation data on Wednesday could rock the ship.
- US S&P Global PMI indices remained in contractionary territory, but came in better than expected.
- AUD/USD Price Analysis: Extend its uptrend once it recovers 0.7070.
The pair AUD/USD It remains firm late in the New York session, although the mixed mood in the markets keeps traders attentive to safe-haven assets. The US dollar (USD) has recovered some ground late in the session, slowing the AUD/USD’s steady advance. At the time of writing, the AUD/USD is trading at 0.7045.
AUD/USD rises sharply ahead of Australian inflation data
Wall Street remains mixed, as shown by the Dow Jones Industries holding firm, while the S&P500 and Nasdaq fluctuate. In the US economic calendar, the business activity report published by S&P Global stands out. US PMIs for December improved, with the Services PMI jumping to 46.6 vs. 44.7 expected, while the Manufacturing PMI advanced to 46.8 vs. 46.2 estimate.
The S&P Global Composite, which measures both indices, rose to 46.6, above the 45 forecast. It must be said that, although business activity continues to deteriorate in the US economy, the downward trend has moderated somewhat.
On the Australian side, the agenda will include inflation data. According to Reuters, expectations for the Consumer Price Index (CPI) for the first quarter are 1.6%, while on an annual basis, it turned out to be 7.5%. Analysts at TD Securities noted that “the cut measure that will attract the most attention. TD stands at 1.6% q/q vs RBA, and consensus at 1.5% q/q. Our forecasts call for the y/y cut to be as high as High since 1990 at 6.6%, vs. 6.5% for RBA and consensus, up from 6.1% y/y prior We expect the annual cut to be between 6.1% and 6.5% to set a 25 basis point rise next month”.
AUD/USD Technical Analysis
The AUD/USD daily chart shows the pair trending up. The pair managed to post gains on three consecutive days, though it struggled to break the January 18 daily high at 0.7063. However, the AUD/USD bias remains bullish for a few reasons: the 20 day EMA crossed above the 200 day EMA, while the 50 and 100 day EMAs are getting closer. Furthermore, the Relative Strength Index (RSI) remains in bullish territory. Therefore, the first resistance for AUD/USD would be the high at 0.7063, followed by 0.7100. Breaking above would expose the Aug 11 high at 0.7136.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
