The AUD/USD pair is currently finding support from various factors but lacks strong bullish momentum as it struggles to break above the key 200-day Simple Moving Average (SMA) around the 0.6600 level. The Reserve Bank of Australia’s (RBA) hawkish stance is helping to support the pair amid a subdued US Dollar (USD) market. However, traders are eagerly awaiting the release of the US Consumer Price Index (CPI) data to determine the Federal Reserve’s next move.
On the technical side, a break above the 200-day SMA could lead to further gains for the AUD/USD pair, with potential targets at 0.6655, 0.6675-0.6680, and ultimately 0.6700. Failure to break above the SMA may see the pair finding support at 0.6575-0.6570, 0.6545, and 0.6520 before potentially dropping to 0.6435 and 0.6400 levels.
Key economic data from Australia, such as the Wage Price Index, indicate inflationary pressures in the economy, further supporting the RBA’s view on interest rates. However, concerns about an economic slowdown in China, Australia’s largest trading partner, and geopolitical tensions in the Middle East are keeping a lid on the Australian Dollar’s gains.
Traders should keep an eye on upcoming Chinese macro data, including Industrial Production and Retail Sales figures, for further market direction. Overall, the fundamental backdrop seems to favor bullish traders, but caution is advised due to the lack of strong buying momentum.