AUDUSD is recovering from a ten-month low
- The pair bounced back from 0.6330 on Wednesday and climbed above 0.6400 on Thursday.
- The rebound was mainly driven by a correction in the US Dollar, which weakened against most of its rivals.
- The pair is currently trading around the 20-day Simple Moving Average (SMA) at 0.6415, indicating some bullish momentum.
AUDUSD faces mixed signals from economic data
- In Australia, the August Retail Sales data showed a 0.2% increase, slightly below market expectations of 0.3%.
- The annual rate slowed from 2.1% in July to 1.5% in August, marking the lowest reading since August 2021.
- In the US, data revealed that Gross Domestic Product (GDP) expanded at an unrevised annualized rate of 2.1% during the second quarter, while Initial Jobless Claims rose modestly last week to 204,000, below the market consensus of 215,000.
AUDUSD awaits key events from both countries.
- The pair is likely to be influenced by Federal Reserve (Fed) Chair Powell’s speech and the release of the US Core Personal Consumption Expenditure (PCE) Price Index on Friday.
- The PCE Price Index is the Fed’s preferred inflation measure and could have an impact on the monetary policy outlook.
- In Australia, the Reserve Bank of Australia (RBA) Governor Bullock’s first meeting next week is expected to keep the interest rate unchanged at 0.25%, but could provide some guidance on the economic outlook and the policy stance.
AUDUSD faces significant technical levels on both sides.
- On the upside, a consolidation above 0.6425 could lead to the next critical area of resistance around 0.6445, which represents a horizontal level and a downtrend line.
- A break above that level would strengthen the Aussie and open the door for further gains towards 0.6465 and 0.6500.
- On the downside, a decisive break below 0.6385 would increase bearish pressure, potentially exposing the 0.6360 support area.
- A break below that level would confirm the downtrend and target the recent low at 0.6330.