- The AUD/USD pair is experiencing a lack of bullish momentum and is currently trading around 0.6550, below the day’s high of 0.6589.
- The RBA indicated its rate hike is intended to prepare markets for a potentially larger monetary policy response due to continued high inflation.
- The Federal Reserve Minutes reflect a cautious and neutral stance by officials, who insisted that further tightening could be appropriate if inflation stagnates.
AUD/USD fails to gain traction on Tuesday, falling below Monday’s high and trading at 0.6550 after hitting a daily high of 0.6589 during the European session.
Australian Dollar falls below 0.6560 despite RBA minutes showing hawkish stance
A shift in market sentiment drove AUD/USD lower despite the Reserve Bank of Australia (RBA) revealing minutes of its latest meeting showing a hawkish stance. In the Minutes, the RBA stated that the rise was intended to cushion markets from a “broader monetary policy response” as inflation remains elevated.
In the United States, the housing market paints a bleak economic picture, despite voices pointing to a soft landing. Existing home sales in October fell -4.1% to 3.79 million, down from 3.95 million in September.
Recent publication of the minutes of the last meeting of the US Federal Reserve, according to which all participants voted in favor of keeping rates unchanged in the range of 5.25%-5.50% and that the Future meetings would depend on the data. The minutes showed a neutral approach from Fed officials, as participants noted that further tightening would be appropriate, although they acknowledged that inflation has moderated.
The market reaction to the FOMC minutes caused the AUD/USD pair to remain around the current level. The Dollar Index (DXY), which tracks the evolution of the dollar against six rival currencies, remains in the green at 103.61, up 0.16%.
AUD/USD Price Analysis: Technical Outlook
The AUD/USD daily chart shows the pair with a neutral bias, and its recovery was limited by strong resistance. Buyers were unable to break the 200-day moving average (DMA) at 0.6588, exacerbating a pullback. If the main pair manages a daily close below 0.6556, Monday’s daily close could open the door to further declines, with sellers targeting 0.6500. On the other hand, if AUD/USD reclaims the 200-DMA, it could pave the way to test 0.6600.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
