- The AUD/USD pair bounces from 0.6270 towards 0.6316, with the Australian Dollar showing resistance against the US Dollar.
- US GDP growth of 4.9% and increased durable goods orders, setting the stage for a Fed rate hike.
- Inflation figures and comments from the RBA governor increase the likelihood of a rate hike in Australia.
The pair AUD/USD rose in day trading with gains of 0.17% after hitting a daily low of 0.6270, but encouraging growth data from the United States (US) bolstered the Dollar (USD), a headwind against for the AUD. However, the AUD remained strong and the pair traded at 0.6316.
AUD gains ground even though strong US data could prompt Fed tightening
The US Bureau of Economic Analysis (BEA) revealed that the economy grew at the fastest pace in almost two years, as the third quarter Gross Domestic Product (GDP) exceeded the 4.3% forecast, standing at 4.9% . Additionally, September durable goods orders rose 4.7%, significantly beating the consensus forecast of 1.7%. Given the strength of the economy, the US Federal Reserve (Fed) has the perfect excuse to raise rates, as the economy continues to grow above trend.
Other data included the publication by the US Bureau of Labor Statistics (BLS) of initial claims for unemployment benefits for the week ending October 21, which increased by 210,000 claims. This figure exceeded both forecasts and the previous week’s figures (208,000 and 200,000, respectively), indicating a possible relaxation of the labor market.
Apart from this, the latest inflation figures in Australia increased the chances of a hike by the Reserve Bank of Australia (RBA)¸ which has remained on hold, but with a data-dependent approach. RBA Governor Michelle Bullock’s latest statements have tempered those assumptions, stating that the Consumer Price Index (CPI) report was in line with policymakers’ expectations, while assessing the possibilities that would justify a rise in rates.
The PPI for the third quarter will be published on the Australian economic agenda. In the United States, the Fed’s preferred inflation indicator, the core CPI, will be published along with consumer sentiment from the University of Michigan.
AUD/USD Price Analysis: Technical Outlook
The AUD/USD bearish trend remains intact, despite making a bottom around 0.6300, as the 50-day and 200-day moving averages (DMA) remain bearish. For a bearish continuation, the pair needs to break above 0.6300, followed by the current year-to-date low at 0.6270. Once these two levels are surpassed, the next would be the minimum of October 21, 2022 at 0.6210. On the other hand, if buyers want to regain control, they need to lift prices above the 50-DMA at 0.6395.
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.
