Is AUD/USD Losing Momentum After Weak Aussie Data?
AUD/USD dips, trading within a sideways consolidation range following weaker-than-expected Australian economic data.
FUNDAMENTAL OVERVIEW:
AUD/USD is down 0.4% on Tuesday as the Australian Dollar (AUD) faces pressure from weakening household sentiment and a slowing labor market. The Westpac Consumer Confidence Index fell 3.5% in October to 92.1 from 95.4 in September, marking its sharpest decline since April. Meanwhile, ANZ Job Advertisements declined 3.3% in September, indicating slower hiring momentum.
These indicators reinforce the Reserve Bank of Australia’s (RBA) cautious approach, following its decision to keep the Official Cash Rate (OCR) at 3.6%, noting that inflation remains more persistent than expected. Market focus now turns to RBA Governor Michelle Bullock’s appearance before the Senate Economics Legislation Committee on Friday for further policy guidance.
In the U.S., the Dollar (USD) continues to benefit from safe-haven demand amid global political uncertainty. The US Dollar Index (DXY) rises 0.3% to 98.45, even as markets increasingly price in Fed rate cuts—94% odds for October and 84% for December, according to CME FedWatch. Comments from Kansas City Fed President Jeffrey Schmid on Monday bolstered the Greenback, highlighting the importance of maintaining the Fed’s inflation-fighting credibility. Meanwhile, the ongoing US government shutdown, now in its fourth round of failed funding bills, has delayed key economic releases, including the September employment report.
AUD/USD TECHNICAL ANALYSIS CHART:
Technical Overview:
AUD/USD is trading within an up channel.
AUD/USD is moving below 20&50 Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Buying Zone, while the Stochastic oscillator suggests a Neutral trend.
Immediate Resistance level: 0.6622
Immediate support level: 0.6585
HOW TO TRADE AUD/USD
After a sharp decline, AUD/USD found support and rebounded strongly, breaking through a key resistance level. However, the bullish momentum soon waned, triggering a reversal that brought the pair back toward critical support. The pair is currently testing this level; a sustained break below it could lead to further declines.