FOMC members’ views on inflation
Beyond the numbers, investors should keep an eye on Fed comments. Their views on inflation, the labor market and the Fed’s interest rate path could influence bets on a 50 basis point rate cut in September.
On Wednesday, FOMC voting member Raphael Bostic downplayed the likelihood of a Fed rate hike in September and said there was still a long way to go on inflation.
Short-term forecast: bullish
Short-term AUD/USD trends will depend on US jobless claims (Thursday), Australian retail sales (Friday) and the US personal income and spending report (Friday).
Weaker-than-expected Australian retail sales could dampen expectations of an RBA rate hike. However, higher US unemployment, a decline in private spending and weaker US inflation could increase expectations of a 50 basis point Fed rate cut, potentially pushing AUD/USD towards $0.70.
Investors should pay close attention to economic data and central bank commentary that could affect the price action of AUD/USD. Monitor real-time data, news updates and expert commentary to adjust your trading strategies.
Stay up to date with our latest views and analysis to manage your exposure to the forex markets.
AUD/USD exchange rate development
Daily chart
AUD/USD fluctuated well above the 50-day and 200-day EMAs, confirming the bullish price trend.
A break above the $0.67967 resistance level would support a move towards $0.68500. Moreover, a breakout above $0.68500 could give the bulls a run towards the $0.68996 resistance level. AUD/USD last tested the $0.68996 resistance level in mid-July.
Investors should consider Australian private capital spending figures, US jobless claims and central bank comments.
Conversely, a drop below $0.67500 could bring the $0.67003 support level into play. A drop below the $0.67003 support level could signal a decline towards the 50-day EMA.
With a daily RSI reading of 64.90 for the last 14 periods, the Australian dollar could break the resistance level of $0.67967 before entering the overbought zone.
