- AUD / USD remains under pressure after suffering the worst drop in a week.
- The RBA Minutes and Governor Lowe’s comments reversed rate hike expectations.
- The Xi-Biden meeting offers no positive surprises, the US data adds to the comments on the Fed rate hike.
- Next on the Calendar: Australia’s Third Quarter Wage Price Index, Fed Statements
The AUD/USD remains depressed around 0.7300, having suffered the worst drop in a week.
The AUD / USD pair took multiple hits from domestic and foreign catalysts to welcome bears on Tuesday. These included updates from the Reserve Bank of Australia (RBA), headlines about the virtual meeting of US President Joe Biden and his Chinese counterpart, Xi Jinping, and US data that fueled hopes for Fed action. , backed by comments from some current and former US federal representatives, Fed policy makers.
The Minutes from the last RBA meeting reconfirmed the Australian central bank’s view that rate hikes are off the table by 2024. RBA Governor Philip Lowe endorsed the same ideal, saying: “The most recent data they do not justify a rate hike next year. ” that it is still plausible that the first increase is not before 2024. These updates cooled expectations of rate hikes that soared especially after the jump in Australia’s third-quarter inflation figures.
Going forward, AUD / USD traders will wait for the third quarter wage price index, expected at 0.5% versus 0.4% previously, for a corrective pullback even as the RBA has dismissed rate hike concerns. After that, statements from Fed members and risk catalysts will be key. Overall, a firmer US dollar and the momentum of Fed action may keep the bears hopeful.
Technical analysis
The failures of the AUD / USD pair to cross a convergence of the 50 SMA on the four-hour chart and a two-week resistance line, around 0.7360 at press time, steers the price towards the update of the monthly low of 0.7278.
ADDITIONAL IMPORTANT LEVELS
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