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AUD/USD stabilizes near 0.6600 awaiting US CPI and Fed

  • AUD/USD remains slightly below 0.6600 as the outlook remains uncertain.
  • The Fed is expected to keep interest rates unchanged for the seventh consecutive time.
  • The Australian dollar will dance to the tune of employment data.

The AUD/USD pair modestly gains ground below the 0.6600 round resistance level in the American session on Tuesday. AUD/USD finds support even as US Dollar (USD) holds firm amid cautious market mood ahead of US Consumer Price Index (CPI) data. ) for May and the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.

The S&P 500 opens on a bearish note amid expectations that the Fed will keep interest rates in the 5.25%-5.50% range. US 10-year Treasury yields have fallen to 4.44% but maintain their strong recovery from 4.27%. The US Dollar Index (DXY) extends its rise to the monthly high near 105.45.

Investors believe the Fed will keep interest rates at their current levels for the seventh consecutive time as the fight against persistent inflation continues. Fed officials will not consider rate cuts until they are convinced that inflation will sustainably return to the desired rate of 2%.

Investors will pay close attention to the US CPI data for May to determine the current state of inflation. Annual core inflation, which excludes food and energy prices, is estimated to have slowed to 3.5% from the previous release of 3.6%, with the headline figure rising steadily by 3.4%.

Meanwhile, the Australian dollar will dance to the tune of employment data for May, due out on Thursday. The Australian workforce is expected to have increased by 27,500 new payrolls. In April, Australian employers hired 38,500 new workers. The unemployment rate is estimated to have decreased to 4.0% from 4.1% in April. Employment data will influence market speculation on Reserve Bank of Australia (RBA) rate cuts.

Investors are currently hoping the RBA will not cut interest rates this year. Market expectations that the RBA will keep interest rates tight throughout the year strengthened after RBA Governor Michele Bullock indicated the central bank is prepared to raise interest rates further if inflation does not returns to the target range of 1%-3%.

AUD/USD

Summary
Latest price today 0.66
Today’s daily change -0.0010
Daily change % today -0.15
Today’s daily opening 0.661
Trends
SMA20 Journal 0.6646
SMA50 Daily 0.6578
SMA100 Journal 0.6562
SMA200 Journal 0.6541
Levels
Previous Daily High 0.6611
Previous Daily Low 0.6576
Previous Weekly High 0.6699
Previous Weekly Low 0.6579
Previous Monthly High 0.6714
Previous Monthly Low 0.6465
Daily Fibonacci 38.2% 0.6598
Daily Fibonacci 61.8% 0.6589
Daily Pivot Point S1 0.6587
Daily Pivot Point S2 0.6564
Daily Pivot Point S3 0.6552
Daily Pivot Point R1 0.6622
Daily Pivot Point R2 0.6634
Daily Pivot Point R3 0.6657

Source: Fx Street

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