The Australian dollar (AUD) kicked off the week with a subdued performance against the US dollar (USD), hovering around the 0.6590 mark. Following a substantial drop last Friday, triggered by disappointment over China’s latest economic stimulus measures, the pair is currently consolidating recent movements.
China’s announcement of debt reduction and support for local governments and economic growth fell short of expectations, leaving investors yearning for more detailed information. Given China’s crucial position as Australia’s top trading partner, any economic shifts there have a profound impact on the AUD’s performance. The ongoing uncertainties surrounding the implications of Donald Trump’s US presidential win also continue to influence market sentiment, particularly regarding US-China relations.
This week promises to be pivotal for Australian economic data, with the release of Q3 payroll statistics and overall employment data. These releases will be crucial in assessing the Reserve Bank of Australia’s (RBA) future monetary policy decisions. Adding to the mix, RBA Governor Michele Bullock’s participation in a regulatory panel might offer valuable insights into the central bank’s views on inflation and economic demand.
Technical Outlook for AUD/USD
Currently, AUD/USD is trading within a tight consolidation range around 0.6589. Technical analysts anticipate a potential downward breakout towards 0.6544, potentially extending to 0.6494 before a possible reversal. Should the pair reach these levels, a rebound towards 0.6715 could be on the cards, with an interim target at 0.6600. The MACD indicator currently supports a bearish outlook in the short term, pointing downwards from above the zero line.
On the hourly chart, after completing a decline to 0.6557 and a subsequent correction to 0.6600, expectations are for a further dip to 0.6544. Success in reaching this level may trigger a rebound to 0.6600, testing from below before potentially resuming the downward trend towards 0.6494. The stochastic oscillator, currently below the 50 mark, reinforces the potential for further declines.
This analysis provides insights into the market dynamics impacting the AUD/USD pair, but it should not be considered trading advice. Always conduct your own research and consult with a qualified financial professional before making any investment decisions.
