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AUD/USD Current Price: 0.6563
- Australia’s Q3 GDP growth came in at 0.2% compared to the previous quarter, below the expected 0.4%.
- The US ADP report came in below expectations; Jobless Claims are due on Thursday, followed by NFP on Friday.
- The AUD/USD rebounded but still faces bearish pressure.
The AUD/USD rose modestly after experiencing sharp declines over the past two days. The pair reached a peak at 0.6599 on Wednesday but then retraced, trimming gains and indicating ongoing bearish pressure. Despite lower Treasury yields and softer labor market data, the US Dollar remained firm.
On Wednesday, Australia reported that Gross Domestic Product (GDP) expanded by 0.2% during the third quarter, below the 0.2% of the previous quarters. The annual growth rate came in at 2.1%, slightly higher compared to Q2 but largely reflecting revisions to previous quarters. While the figures did not have a significant impact on markets during a quiet session, they provide evidence of a slowing economy.
As data continues to soften and inflation moves in the right direction, the markets do not anticipate more rate hikes from the Reserve Bank of Australia (RBA). Price expectations are starting to reflect potential rate cuts by mid-2024.
On Thursday, Australia will release trade data and the Building Permits report for October. Later, the focus will turn to China’s trade figures from November, which could be relevant for risk sentiment.
In the US, the ADP Employment Report came in below expectations, and overall reports continue to show easing inflationary pressures. US yields continue to move lower, with the 10-year hitting fresh multi-month lows. However, the US Dollar remained firm. More employment data is due on Thursday with Jobless Claims, and on Friday, the Nonfarm Payrolls report could challenge the strength of the Dollar.
AUD/USD short-term technical outlook
The AUD/USD reached a bottom on Wednesday at 0.6540, slightly above the 20-day Simple Moving Average (SMA), and then rebounded towards 0.6600. However, it lost momentum and dropped back towards 0.6550. The bearish momentum eased, suggesting potential consolidation ahead.
On the 4-hour chart, the risks are tilted to the downside as the price remains below a bearish 20-SMA and an uptrend line. Technical indicators initially favor the downside, with momentum and the Relative Strength Index (RSI) moving lower, while the Moving Average Convergence Divergence (MACD) remains firmly negative. A consolidation below 0.6540 could pave the way for further downside towards 0.6530, followed by 0.6495. On the upside, a reclaiming of 0.6610 would remove the near-term bearish bias.
Support levels: 0.6545 0.6530 0.6510
Resistance levels: 0.6590 0.6610 0.6640
View Live Chart for the AUD/USD
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