AUD/USD Current Price: 0.6500
- US consumer inflation surprises to the downside, triggering a dollar selloff.
- Australian wage inflation data will be released on Wednesday and employment data on Thursday.
- The AUD/USD had its best day in months, surging to 0.6500.
The AUD/USD rose significantly due to the collapse of the US Dollar and increased risk appetite following the release of US consumer inflation data. The pair appears poised to test a critical technical level and maintains a bullish tone.
The US Consumer Price Index (CPI) came in lower than expected in October, with the annual rate slowing from 3.7% to 3.2%, below the market consensus of 3.3%. The Core CPI rose by 0.2% in October, below expectations, and the annual rate dropped to 4%. These numbers reinforced the narrative that the Federal Reserve is unlikely to continue raising interest rates.
The data triggered a sharp decline in the US Dollar and boosted equity prices. Commodities also experienced a surge. All of this favored the AUD/USD, which jumped to 0.6500. More US inflation data is expected on Wednesday, including the Producer Price Index (PPI), along with the October Retail Sales report.
In Australia, the focus will be on the Wage Price Index report for the third quarter. On Thursday, the employment report will be released. However, price action is being dominated by the weakness of the US Dollar, which, if it persists, could set the stage for further gains for the AUD/USD pair.
AUD/USD short-term technical outlook
The daily chart of AUD/USD shows the pair trading slightly above the 100-day Simple Moving Average (SMA), with technical indicators biased to the upside. The Relative Strength Index (RSI) and Momentum are both moving higher. If the pair remains around 0.6500, it appears poised to test the crucial resistance area around 0.652, with a consolidation above opening the doors to 0.6600.
On the 4-hour chart, the bias remains to the upside. The RSI is above 70 but has not turned downward yet. The pair is not showing signs of exhaustion. If the positive momentum continues, a test of 0.6520 seems likely. On the downside, immediate support is around 0.6480, an area that could attract new buyers.
Support levels: 0.6470 0.6405 0.6380
Resistance levels: 0.6520 0.6545 0.6565