- The fall in AUD/USD is influenced by a surprise decision to maintain the PBoC rate amid tight liquidity conditions due to the US market holiday.
- Mixed economic data throughout January could prevent the RBA from raising short-term rates.
- The pair is at the mercy of the Australian Dollar economic data, along with the New York Empires State Index and the Fed's Waller speech.
The Australian Dollar (AUD) fell during the American session by 0.42% against the United States Dollar (USD) due to deteriorating confidence and low volume conditions, as United States (US) financial markets remain closed for the Martin Luther King (MLK) holiday. AUD/USD is trading at 0.6655 after hitting a high of 0.6705.
AUD/USD boosted by risk aversion at start of week
AUD/USD was hit by risk appetite, as well as the People's Bank of China (PBoC) keeping rates unchanged at 2.50%, coughing up unconcerned traders, even as the Chinese economy drags on. grow to the levels expected by the president of China, Xi Jinping.
Meanwhile, economic conditions in Australia remained challenging, with most of its PMIs remaining in contraction territory despite a slight improvement. Additional data was positive, with retail sales beating the 1.2% forecast, hitting 2% on January 6, adding to inflationary pressures, which dissipated in the latest report. On January 9, the Australian Bureau of Statistics (ABS) revealed that headline inflation hit 4.3%, diving for the third month in a row, which could deter the Reserve Bank of Australia (RBA) from raising rates.
Ahead of the week, Australia's economic calendar will include Westpac consumer confidence along with the release of housing data. On the US front, the calendar would include the New York Empire State Manufacturing Index on Tuesday, along with Federal Reserve Governor Christoper Waller's speech.
AUD/USD Price Analysis: Technical Outlook
The daily chart shows the pair as neutral to bullish biased, but in the last week, it has been trading sideways, unable to gather direction. If buyers lift AUD/USD beyond the first resistance seen at 0.6700, they will face the next top at the January 12 high of 0.6727. Once over the hurdle, the next stop would be the January 5 high of 0.6747, before 0.6800. On the other hand, downside risks remain at the January 5 low of 0.6640, followed by the threshold of 0.6600.
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.
