AUD/USD rebounds as investors eye Fed decision, Chinese data boosts AUD

• The AUD/USD pair is trading at 0.6435, recovering from a daily low of 0.6416, as Chinese economic data boosts market sentiment.
• The US Federal Reserve is expected to keep interest rates steady, with a 99% chance of no change, as investors wait for future rate developments.
• Michelle Bullock will begin her term as the new RBA Governor, with Australian economic data, including PMIs and inflation, on the agenda for the week.

He Australian dollar (AUD) recovers ground against US dollar (USD), as investors prepare for a busy week in central banking as the US Federal Reserve is expected to keep rates unchanged. Improved Chinese economic data, driven by his government, cushioned the AUD’s decline. The AUD/USD pair is trading at 0.6435 after hitting a daily low of 0.6416.

The Australian Dollar advances against the US Dollar on the eve of a busy week for central banks, boosted by positive economic data from China

Market sentiment has improved thanks to Chinese data showing a more optimistic outlook, which was threatened by deflation and a sudden economic slowdown. This boosted the Australian Dollar (AUD), which is recovering amid an absent economic agenda.

Last week, the US economy experienced a spike in inflation on the part of consumers and producers, while the labor market continues to rise. Retail sales grew more slowly than estimated, but remained solid above the 2% threshold. However, consumer sentiment fell due to high gasoline prices, according to a survey by the University of Michigan (UM).

Throughout the week a series of data on housing in the United States will be released, but all eyes are on Jerome Powell and company. Money markets are not expecting a surprise from the Fed, with the odds of keeping rates unchanged at 99%. Aside from the monetary policy statement, traders are watching the “dot plots” for Fed officials’ expectations regarding the path of the federal funds rate (FFR).

In Australia, banking services and manufacturing PMI indices and inflation data will be released. However, the highlight of the week is that Michelle Bullock begins her tenure as the new Governor of the Reserve Bank of Australia (RBA).

AUD/USD Price Analysis: Technical Outlook

The price action portrays the pair printing a hammer preceded by a slight uptrend, with a high around last week’s high of 0.6475. However, if buyers break through that zone, the pair could test 0.6500 and resume its uptrend to test the 50-day moving average (DMA) at 0.6551. On the contrary, and in the most likely scenario, AUD/USD could extend its losses, but first sellers must drag prices below 0.6400. If this last level is broken, the pair could slide towards the yearly lows of 0.6357.