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AUD/USD hovers around 0.6850 below daily high around 0.6900

  • AUD/USD remains positive, although far from daily highs.
  • Fed Mester: Expect the Fed Funds Rate (FFR) to end at around 4% in 2023.
  • Mixed US economic data, a tailwind for AUD/USD.

The AUD/USD it is almost lateralized, although far from the highs of the day after reaching a daily high above the 0.6900 mark. Factors like risk aversion courtesy of month end flows coupled with Fed speakers reiterating the need to get into tightening mode. At the time of writing, the AUD/USD is trading at 0.6858, just above its opening price.

US equities remain heavy due to risk aversion. The Fed’s monetary policy makers continue to command attention. On Wednesday, Loretta Mester said that US rates have to be above 4% by next year, while adding that she does not expect rate cuts in the coming year. She added that recession fears have increased, but are not part of her baseline.

In terms of data, the US economic calendar was sparse, although the first data for August, the ADP Employment Change, was released after a pause due to some changes made to the survey. Private hiring increased by 132,000 less than in July, 270,000. Later, the Chicago PMI for August rose more than estimated, topping 52.2 vs. 52 expected by analysts.

Meanwhile, on the Australian side, Australian construction work for the second quarter slumped 3.8% QoQ against estimates of a 0.9% expansion.

Analysts at ANZ said “weakness was widespread across states and sectors. This raises concerns that construction activity may not be as strong as we had hoped this year, despite extensive bookings of work remaining to be done, especially in the residential and infrastructure sectors Demand is still there, sector capacity utilization is well above average, but supply constraints do not explain the magnitude of second quarter weakness.

What to watch out for

The Australian economic docket will include the S&P Global Manufacturing PMI along with the AIG Manufacturing Index, with both readings expected to slow. In the US, the calendar will include jobless claims, the S&P Global PMI and, most notably, the ISM Manufacturing PMI.

AUD/USD Key Technical Levels

AUD/USD

Panorama
Last Price Today 0.6849
Today’s Daily Change -0.0004
Today’s Daily Change % -0.06
Today’s Daily Opening 0.6853
Trends
20 Daily SMA 0.6961
50 Daily SMA 0.6913
100 Daily SMA 0.7016
200 Daily SMA 0.7129
levels
Previous Daily High 0.6957
Previous Daily Minimum 0.6845
Previous Maximum Weekly 0.701
Previous Weekly Minimum 0.6855
Monthly Prior Maximum 0.7033
Previous Monthly Minimum 0.668
Daily Fibonacci 38.2% 0.6888
Daily Fibonacci 61.8% 0.6914
Daily Pivot Point S1 0.6813
Daily Pivot Point S2 0.6773
Daily Pivot Point S3 0.6701
Daily Pivot Point R1 0.6925
Daily Pivot Point R2 0.6997
Daily Pivot Point R3 0.7037

Source: Fx Street

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