VOT Research Desk
The US dollar index (DXY) fell, while China’s inflation data helped push the AUDUSD pair back up to its day’s high of 0.6518. The powerful DXY is falling near Tuesday’s low of 109.35 as the favourable risk profile has once again gotten stronger.
According to the CME FedWatch tool, there are equal odds that the Federal Reserve (Fed) will raise interest rates by 50 or 75 basis points (bps) in its December monetary policy announcement.
The 10-year US Treasury yields are therefore stable at approximately 4.14%. Compared to expectations of 2.4% and the previous report of 2.8%, China’s inflation rate has remained lower at 2.1%.
Expectations of monetary policy easing by the People’s Bank of China have been raised as a result (PBOC).
AUD/USD Technical Analysis
The asset tested the 0.6500-area demand zone on an hourly scale before bouncing back.
The counter has received strong support from the 20-period Exponential Moving Average (EMA), which is located around 0.6505.
Additionally, the 50-EMA at 0.6473 is steadily moving upward, which strengthens the upward filters. The Relative Strength Index (RSI) (14) is now making an effort to pass the 60.00 barrier.
A repeat of the same will start an upward momentum. Aussie bulls will push the asset toward the round-level resistance around 0.6600, then the high from September 21 at about 0.6700, should the asset break above Tuesday’s high at 0.6551.
On the other hand, if the asset falls below Monday’s low at 0.6406, which would push the asset below October 31 low at 0.6368, the Greenback bulls will retake control.
If the asset slips below the latter, it will be exploited to show more decline to the area of the November 3 low at 0.6272.
