Australian dollar rebounds from intraday losses as China’s economic data improves.
The Australian Dollar (AUD) rebounds from initial losses as China releases surprise good data across a range of indices. However, earlier in the day, the AUDUSD pair snapped a two-day winning run. This move came as a result of a speech by Reserve Bank of Australia (RBA) Governor Michele Bullock on Wednesday, as well as positive economic statistics from the United States (US).
If inflation persists, Governor Bullock has proposed considering appropriate policy actions.
Australia’s central bank has expressed increased worry about the inflationary impact of supply shocks. Governor Bullock indicated that if inflation continues to exceed forecasts, the RBA would take appropriate policy actions. There is a discernible slowing in demand, and per capita consumption is falling.
Bullock stated that the full impact of prior rate hikes on spending has yet to be realized. In the face of persistently higher-than-expected inflation, the RBA recognizes the need to act but urges caution, being sensitive to possible upside inflation risks.
The US Dollar Index (DXY) is attempting to rebound from past losses, owing to positive economic data from the United States (US). However, several Federal Reserve (Fed) officials’ dovish views reflect a cautious stance by the central bank, highlighting a reluctance to tighten monetary policy. In the current economic climate.
According to Richmond Fed President Thomas Barkin, present policy is already restrictive. Barkin voiced concern over the November FOMC monetary policy meeting. He underlined that the US central bank cannot tighten monetary conditions just through longer-term higher bond yields.
Australian Dollar Technical Outlook
The Australian dollar is trading above the important level of 0.6350.
During the Asian session on Wednesday, the Australian Dollar is trading at the significant level of 0.6350. The 0.6300 level emerges as a strong support level, aligning with the monthly low of 0.6285. On the upside, a critical resistance is seen around the 21-day Exponential Moving Average (EMA) at 0.6379, which is linked with the significant level of 0.6400.
A breach above the level may reach the area. 0.6429 is the 23.6% Fibonacci retracement level. These technical indicators give traders insight into probable resistance zones that might impact the Australian Dollar trajectory.
