AUD/USD ANALYSIS & TALKING POINTS

• Aussie bulls hoping for bullish continuation.
• US PPI & FOMC under the spotlight later today.
• AUD/USD trades within falling wedge formation.

AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP

The Australian dollar could not eek out any gains against the USD this week despite some positive consumer confidence data for the December period. US CPI rattled markets yesterday but swiftly pulled back to normality today. The US disinflation rate may be slowing and may make the latter leg of the push towards 2% that much more difficult. Coupled with a resilient Non-Farm Payrolls (NFP) report, significant rate cut expectations by the Federal Reserve may be premature.

US PPI is set to tick higher and being touted as a leading indicator for CPI, any upside surprise could weigh negatively on the Aussie dollar.

TECHNICAL ANALYSIS

AUD/USD DAILY CHART

Chart prepared by Warren Venketas, TradingView

AUD/USD daily price action above shows a steady decline since testing the long-term trendline resistance zone (black), now trading below the 200-day moving average (blue). That being said, there is no real directional bias with the Relative Strength Index (RSI) favoring neither bullish nor bearish momentum and prices forming a falling wedge type chart pattern (dashed black line) A breakout above wedge resistance could bring the 0.6596 swing high once more – potentially via a dovish outcome from the FOMC later this evening.

• 0.6700
• Trendline resistance
• 0.6596
• Wedge resistance
• 200-day MA

Key support levels:

• Wedge support
• 0.6500
• 0.6459/50-day MA
• 0.6358

IG CLIENT SENTIMENT DATA: BEARISH (AUD/USD)

IGCS shows retail traders are currently net LONG on AUD/USD, with 65% of traders currently holding long positions.

https://www.dailyfx.com/news/forex-aud-forecast-fomc-communication-pivotal-for-australian-dollar-wv-20231213.html