Australian Dollar breaks its losing skid as monthly CPI rises.
The Australian Dollar (AUD) is poised to end a two-day losing run against the US Dollar (USD). Following the release of Australia’s inflation statistics. Which showed an anticipated increase in August. However, due to risk aversion, the AUDUSD pair is unable to gain. On hot Australian Consumer Price Index (CPI) inflation data. The drop in commodities prices is limiting the AUD’s upward potential.
The minutes of Australia’s (RBA) September monetary policy meeting warned. That if inflation proves to be more persistent than projected, more tightening may be required.
However, the case for maintaining the present approach looked to be more convincing. As a result, the AUDUSD pair’s upward potential may be limited as well.
US Dollar (USD) is trading at 106.30, its highest level since December.
The US Dollar Index (DXY) is trading around its peak since December. The US Dollar’s strength is being bolstered by rising US Treasury rates. The 10-year US bond yield has surged to levels not seen since October 2007.
The positive statistics from the United States (US) announced. On Tuesday is adding to the Dollar’s strength. Consumer Confidence in the United States. As well as Building Permits and House Prices In the reporting period, the Price Index improved.
Furthermore, most members of the US Federal Reserve (Fed) still expect further interest rate hikes later this year. Which might be linked to the country’s healthy economic activity. The Fed has decided to maintain the status quo by keeping interest rates in the range of 5.25% to 5.50%.
Australian Dollar Technical Outlook
The Australian dollar is hovering around the psychological level of 0.6400, with the 21-day EMA acting as a hurdle.
During the Asian session on Wednesday, the Australian Dollar is trading higher around the psychological level of 0.6400.
The AUDUSD pair may encounter resistance at the 21-day Exponential Moving Average (EMA) at 0.6433, followed by the psychological milestone of 0.6450.
A strong break above the latter might help the Australian Dollar (AUD) explore the range around 26.6%.The Fibonacci retracement level is 0.6484.
On the downside, the AUDUSD pair might find critical support at the monthly low of 0.6357, which is linked with the psychological level of 0.6350.
