AUDUSD supported around 0.6645, below the 100 DMA

• The Australian dollar will end the week down 0.50%.
• Existing Home Sales in the United States fell sharply, although they were ignored as the dollar remained strong.
• AUDUSD Price Analysis: The Inverted Head-Shoulder-Shoulder pattern is still in play, although the pair is undergoing a correction.

The Australian dollar (AUD) is set to end the week in the negative, falling against the US dollar (USD), as sentiment has soured, amid the lack of a catalyst, save for Federal Reserve policymakers continuing to his aggressive campaign. Additionally, US Treasury yields rose moderately, supporting the dollar. At the time of writing, the AUDUSD is trading at 0.6675.

US housing data feels the pain of rising interest rates

The US economic calendar revealed Existing Home Sales for October, which plunged 5.9%, below the 4.17% expansion expected by economists. It must be said that home sales have fallen since February 2022, while the Fed continued its tightening cycle in its fight against high levels of inflation. Meanwhile, a number of Federal Reserve officials reiterated that inflation is high, that the October inflation numbers, while encouraging, are only one positive reading in 11 months, and added that they would continue to raise rates.

Despite the efforts of Fed officials to oppose a Fed pivot, it took St. Louis Fed President James Bullard to say that rates are not “tight enough” and add that rates they would have to go up to the range of 5% to 5.25%. US stocks fell on these remarks, which were later echoed by Minnesota Fed President Neil Kashkari, commenting that one month’s worth of data cannot overly convince the Fed, as it must continue until it is ready. sure that inflation has stopped rising.

During the Asian session, the Australian dollar took a backseat as the US dollar gained strength. The lack of economic data on the Australian calendar kept traders focused on the latest Australian jobs report, which surprised market analysts. However, the Reserve Bank of Australia’s (RBA) expectations of further tightening were unchanged. As of today, money market futures have priced at 88% the possibility of a 25 basis point rally at the December 5 meeting.

AUDUSD Price Analysis: Technical Perspective

After hitting a weekly high above 0.6800, the AUDUSD erased those gains, extending its losses below the 100-day EMA at 0.6699. Although the inverted head and shoulders chart pattern formed on the AUDUSD daily chart is still in play, the sudden reversal could be seen as profit booking by AUD buyers and a pause before storming the psychological 0.6800 level.

Therefore, the AUDUSD could pull back to 50-61.8% Fibonacci retracement levels around the 0.6545-0.6594 zone before rallying towards 0.6800 and beyond the head and shoulders target around 0.6870.