AUD/USD ANALYSIS & TALKING POINTS

• Encouraging Chinese expectations keep AUD bid.
• All eyes on RBA and FOMC minutes tomorrow.
• AUD/USD bulls eye 200-day MA.

AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP

The Australian dollar capitalized on last week’s close above the 0.6500 psychological handle this Monday morning as markets mull over global monetary policy. Recent weak US economic data particularly from the labor market saw US Treasury yields slip alongside USD weakness. Australian jobs data was quite the opposite with unemployment holding steady while employment change beat estimates. Inflation expectations have pushed higher and that could place more pressure on the Reserve Bank of Australia (RBA) to sustain tight monetary policy with the possibility of additional interest rate hikes. Looking at money market pricing below, it is evident that markets have left the door open for more tightening. That being said, incoming data will be crucial for guidance around central bank strategy.

RBA INTEREST RATE PROBABILITIES

Source: Refinitiv

TECHNICAL ANALYSIS

AUD/USD DAILY CHART

Chart prepared by Warren Venketas, TradingView

AUD/USD daily price action above has now confidently broken above the 0.6500 level and head towards the 200-day moving average (blue). Bearish/negative divergence remains in play via the Relative Strength Index (RSI) and could unfold with a peak around the 200-day MA resistance zone.

• 0.6596
• 200-day MA

Key support levels:

• 0.6500
• 0.6459
• 50-day MA
• 0.6358

IG CLIENT SENTIMENT DATA: BULLISH (AUD/USD)

IGCS shows retail traders are currently net LONG on AUD/USD, with 60% of traders currently holding long positions.

https://www.dailyfx.com/news/forex-aud-usd-price-forecast-positive-start-for-aussie-dollar-wv-20231120.html