Aussie Breakout Holds For Now
AUDUSD continues to hold above the .6520 level for now following the breakout earlier this week. It looks as though the pair has overcome the hurdle of the FOMC minutes and is now set to continue higher. Yesterday, the minutes revealed that Fed members remain concerned around upside inflation risks and were still willing to use further tightening if necessary, with no mention of imminent rate cuts seen.
Fed Seen Holding Ahead of H1 2024 Cut
However, it seems that with the recent October CPI reading showing a further fall in inflation, the minutes have lost some of their potency. The Fed is now widely expected to keep rates on hold through year end with traders currently pricing in a rate cut as the next adjustment to monetary policy, due in H1 2024.
Data in Focus
With USD undergoing a strong correction lower, there is room for AUD to continue higher near-term. With plenty of US data due through the rest of the week there is plenty of opportunity for fresh USD downside to drive the pair higher. Additionally, if we see any uptick in tonight’s Aussie PMI data this should help further advance the breakout.
Technical Views
AUDUSD
The breakout AUDUSD above the .6520 level has stalled for now. However, with the pair holding a retest of the level from above, the focus remains on further upside near-term in line with bullish momentum studies readings. While above here, the focus is on a test of the bearish trend line ahead of the next structural resistance at the .6681 level. Notably, we have an active buy signal in the signal centre today set at .6485 suggesting a preference to buy any dips from current levels.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.