Note

AUD/USD seesaws near 0.6850 as pre-Fed anxiety probes RBA Governor Lowe’s optimism

· Views 44
  • AUD/USD fails to cheer positive economic expectations of RBA Governor Philip Lowe near a three-month high.
  • RBA’s Lowe appears optimistic on cross-border payments, economic growth due to the same.
  • US inflation bolstered case of slower Fed rate hikes and drowned the US Dollar ahead of FOMC.
  • China-linked headlines, pre-Fed caution probe Aussie Dollar bulls.

AUD/USD treads water around 0.6855 during early Wednesday, after a volatile day that offered the biggest jump in a fortnight and refreshed a three-month low.

While the downbeat US inflation number propelled the Aussie pair, chatters surrounding China and the cautious mood ahead of the Federal Open Market Committee (FOMC) monetary policy meeting test momentum traders.

It’s worth noting that Reserve Bank of Australia (RBA) Governor Philip Lowe spoke recently at the AusPayNet Annual Summit. "Overall, we are optimistic that least-cost routing will help counter the forces that are adding to merchants' payment costs, particularly for small businesses," Lowe said per Reuters.

That said, US Consumer Price Index (CPI) dropped to 7.1% YoY in November versus the 7.3% expected and 7.7% prior. Further, the CPI ex Food & Energy, known as the Core CPI, also declined to 6.0% YoY during the stated month compared to 6.1% market forecasts and 6.3% previous readings. “Traders of futures tied to the Federal Reserve’s policy rate boosted bets Tuesday that the U.S. central bank will notch down its interest-rate hike pace further early next year, after a government report showed inflation eased sharply in November,” said Reuters. The same drowned the US Dollar Index (DXY) to a six-month low of 103.61 and fuelled the AUD/USD prices before the quote retreated from 0.6893.

Elsewhere, the International Monetary Fund (IMF) Managing Director Kristalina Georgieva was spotted expecting slower economic growth for China due to the latest jump in the daily Covid cases. Additionally, Bloomberg came out with the news suggesting that the Chinese leaders delayed the economic policy meeting due to the COVID-19 problems.

Furthermore, increasing chatters that today’s Fed rate hike worth 50 basis points (bps) rate increase is the last and the US central bank is up for slowing down the rate lift from 2023-start keep the traders on the edge.

Amid these plays, Wall Street closed positive and the US 10-year Treasury yields slumped nearly 11 basis points (bps) to 3.50% by the end of Tuesday’s North American session.

Looking forward, AUD/USD could remain sidelined amid the pre-FOMC cautious mood. However, increasingly dovish expectations raise fears of a wild slump in case of a hawkish surprise from the Fed.

Technical analysis

A daily closing beyond the one-month-old ascending resistance line, near 0.6885 by the press time, becomes necessary for the bulls to keep the reins. However, the bears will wait for a clear break of the 100-DMA support, near 0.6675 at the latest, to take the risk of entry. Hence, AUD/USD may witness further grinding towards the north.

Additional important levels

Overview
Today last price 0.6855
Today Daily Change 0.0104
Today Daily Change % 1.54%
Today daily open 0.6751
Trends
Daily SMA20 0.6727
Daily SMA50 0.6531
Daily SMA100 0.6678
Daily SMA200 0.6907
Levels
Previous Daily High 0.6803
Previous Daily Low 0.6729
Previous Weekly High 0.6851
Previous Weekly Low 0.6669
Previous Monthly High 0.6801
Previous Monthly Low 0.6272
Daily Fibonacci 38.2% 0.6757
Daily Fibonacci 61.8% 0.6774
Daily Pivot Point S1 0.6719
Daily Pivot Point S2 0.6687
Daily Pivot Point S3 0.6645
Daily Pivot Point R1 0.6793
Daily Pivot Point R2 0.6835
Daily Pivot Point R3 0.6867

Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.

FOLLOWME Trading Community Website: https://www.followme.com

If you like, reward to support.
avatar

Hot

No comment on record. Start new comment.