AUD/USD Faces Pressure as it Nears 0.6400 Amidst Economic Uncertainty
AUD/USD declines approaching 0.6400, with an eye on the Australian CPI and US Core PCE.
FUNDAMENTAL OVERVIEW
During Monday’s Asian session, the AUD/USD currency pair lost some of its gains from the previous day and fell to approximately 0.6420. However, the Australian PMI data release on Friday and the weak US Dollar (USD) provided support for the pair’s upward movement.
The rising potential of the dollar may have been constrained by the decline in US Treasury yields. The 10-year US bond’s yield is at 4.46%. At the time of writing, the US Dollar Index (DXY), which gauges the performance of the dollar versus six other significant currencies, is trading at about 105.60.
Market investors are probably anticipating the publication of economic data, particularly the preliminary September S&P Global PMIs for the United States (US). These databases could offer insightful information on the state of the economy and help traders spot potential trading opportunities surrounding the AUD/USD pair.
The Federal Reserve (Fed) decided to keep interest rates in the 5.25–5.50% range during its meeting on Wednesday. In a subsequent press conference, Fed Chairman Jerome Powell reaffirmed the Fed’s commitment to achieving a 2% inflation target. Powell also said that if it were deemed necessary, the Fed would be willing to hike interest rates. The hawkish stance of the Fed could put pressure on the Australian currency pair.
The Australian Services PMI also rose from 47.8 in August to 50.5 in September, marking a four-month high. The Manufacturing PMI, however, fell from 49.6 in the previous month to 48.2, remaining in the contraction zone. The Australian Dollar (AUD) has seen positive sentiment moderated as a result of the manufacturing sector decline, inhibiting strong optimistic bets on the currency.
AUD/USD TECHNICAL ANALYSIS DAILY CHART:
Technical Overview
AUD/USD is currently trading within a down channel.
AUD/USD is positioned below all Moving Averages (SMA).
The Relative Strength Index (RSI) is in the buying zone, while the Stochastic oscillator suggests a negative trend.
Immediate Resistance level: 0.6462
Immediate support level: 0.6411
HOW TO TRADE AUD/USD
After falling in price, the AUD/USD pair began trading in a range. It is currently trading around a support level; if this level is broken, an additional drop is expected.
TRADE SUGGESTION- Stop Sell – 0.6400, TAKE PROFIT AT- 0.6352, SL AT- 0.6435.