The Australian Dollar (AUD) fell further to around 0.6470 during the early European session on Tuesday, pressured by a stronger US Dollar (USD), which hit a three-day high. The USD’s strength, alongside fears of a global trade conflict under a potential return of US President-elect Donald Trump, contributed to the downward movement of the AUD.
Despite this, hawkish remarks from Reserve Bank of Australia (RBA) Governor Michele Bullock offered some support for the AUD. Bullock’s comments last week, highlighting persistent core inflation that precludes near-term interest rate cuts, helped to bolster the Australian currency. Traders will look to upcoming data, including the US JOLTs Job Openings for October and speeches by Federal Reserve officials Adriana Kugler and Austan Goolsbee later on Tuesday. On Wednesday, Australia’s third-quarter Gross Domestic Product (GDP) will also be closely watched.
The Australian Dollar was further pressured by disappointing economic data. Australia’s current account deficit for Q3 exceeded expectations, coming in at A$14.1 billion, up from the revised A$10.7 billion shortfall in Q2 and surpassing the expected A$10.0 billion deficit. However, Australia’s retail sales grew by 0.6% month-on-month in October, higher than the 0.3% forecasted, providing some positive news.
In the US, the ISM Manufacturing PMI rose to 48.4 in November, surpassing expectations, while Federal Reserve officials, including Atlanta Fed President Raphael Bostic and New York Fed President John Williams, spoke about the potential for continued interest rate cuts in the coming months.
From a technical perspective, the AUD/USD pair remains in a downtrend, with the price holding below the critical 100-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI) is below the 50 level, supporting bearish sentiment. A break below 0.6434 could extend the decline toward 0.6330, the lower boundary of the trend channel, with a further drop to 0.6285 possible. Conversely, a sustained rise above 0.6530 could pave the way for a move to 0.6626, with the potential to test 0.6687 if bullish momentum continues.
Related Topics:
