AUD/USD carves a series of higher highs and lows after taking out the December low (0.6526), but the exchange rate may struggle to retain the advance from the month low (0.6525) as it trades below the 50-Day SMA (0.6637) for the first time since November.
US Dollar Forecast: AUD/USD Rebound Eyes Test of 50-Day SMA
AUD/USD may attempt to further retrace the decline from the start of the month as it seems to be bouncing back ahead of the former-resistance zone around the September high (0.6522), and the bullish price action may persist ahead of the Federal Reserve interest rate decision on January 31 on the back of US Dollar weakness.
However, AUD/USD may no longer track the positive slope in the moving average if it fails to push back above the indicator, and the update to the US Personal Consumption Expenditure (PCE) Price Index may influence the exchange rate as the core reading, the Fed’s preferred gauge for inflation, is seen narrowing to 3.0% in December from 3.2% per annum the month prior.
US Economic Calendar
Evidence of slower price growth may fuel the recent rebound in AUD/USD as it raises the Fed’s scope to cut US interest rates in 2024, but a stronger-than-expected core PCE print may generate a bullish reaction in the Greenback as it puts pressure on Chairman Jerome Powell and Co. to further combat inflation.
Until then, AUD/USD may stage a larger recovery as the former resistance zone around the September high (0.6522) now appears to be acting as support, and developments coming out of the US may sway the exchange rate as the Federal Open Market Committee (FOMC) plans to ‘make our decisions meeting by meeting.’
With that said, AUD/USD may stage a larger recovery over the coming days as it carves a series of higher highs and lows, but the exchange rate may struggle to retain the advance from the month low (0.6525) should it no longer respond to the positive slope in the 50-Day SMA (0.6637).
AUD/USD Price Chart – Daily
- AUD/USD bounces back ahead of the former-resistance zone around the September high (0.6522) to carve a series of higher highs and lows, with a move above the 50-Day SMA (0.6637) raising the scope for a move towards 0.6740 (38.2% Fibonacci retracement).
- A breach above the 0.6810 (23.6% Fibonacci extension) to 0.6820 (23.6% Fibonacci retracement) region brings the monthly high (0.6839) on the radar, but AUD/USD may struggle to retain the advance from the month low (0.6525) should it no longer respond to the positive slope in the moving average.
- Lack of momentum to close above the 0.6380 (78.6% Fibonacci retracement) to 0.6410 (50% Fibonacci extension) area may push AUD/USD back towards the 0.6510 (38.2% Fibonacci retracement) to 0.6520 (23.6% Fibonacci retracement) zone, with the next region of interest coming in around 0.6380 (78.6% Fibonacci retracement) to 0.6410 (50% Fibonacci extension).