AUD/USD rises on the impulse of a weak USD ahead of the CPI

• The AUD/USD pair jumped to 0.6375, with gains of 0.30%.
• In the United States, the October CPI will be reported on Tuesday.
• The Australian Consumer Confidence Index for November will also be released on Tuesday.

AUD/USD gained momentum on Monday, trading at the 0.6375 level, with gains of 0.30%, and the pair’s price dynamics were marked by weakness in the US Dollar, which appears to be consolidating last week’s gains.

After the Federal Reserve’s hawkish rhetoric gained relevance last week, the dollar recovered, and now investors are waiting for October inflation figures to continue placing bets on the Fed’s next decisions. The US Consumer Price Index (CPI) has fallen to 3.3% year-on-year from 3.7% previously, while the underlying measure has stagnated at 4.1% year-on-year.

It should be noted that Fed officials were not satisfied with the progress made on inflation and said they needed more evidence to declare that the job is done. In this sense, the result of the inflation figures can set the pace of the price dynamics of the Dollar for the coming sessions, since they will shape the expectations for the next December meeting of the Fed. On the other hand, the performance of the US government bonds are rising. The 2-year Treasury bond yield stands at 5.07%, and the 5- and 10-year yields are seen at 4.70% and 4.67%, respectively, which appears to limit the Dollar’s losses.

AUD/USD levels to watch

The daily chart suggests that the AUD/USD pair has a neutral to bullish technical bias as the bears pull back to consolidate after five consecutive days of losses. The Relative Strength Index (RSI) signals a possible reversal as it exhibits a positive slope below its midline, while the Moving Average Convergence (MACD) displays weaker green bars.

In a broader context, the pair is trading above the 20-day SMA, but below the 100-day and 200-day SMA, indicating that the bears continue to maintain some dominance over the bulls in a broader time horizon. However, the short-term outlook will remain positive if the bulls continue to gain ground and hold above the 20-day SMA.

Supports: 0.6373 (20-day SMA), 0.6350, 0.6300
Resistances: 0.6400, 0.6450, 0.6470.

AUD/USD Daily Chart