AUD/USD Price Analysis – Dec 03, 2024
Daily Price Outlook
During the European trading session, the AUD/USD pair managed to stop its decline and found some bullish momentum around the 0.6490 mark, reaching a high of 0.6505.
However, the US Dollar, which surged to a three-day high, initially pushed the pair lower. Nevertheless, the hawkish comments from Reserve Bank of Australia (RBA) Governor Michele Bullock helped the AUD/USD pair to limit its deeper losses.
On top of this, the ongoing concerns about a global trade war if Donald Trump returns as US President could weigh on market sentiment, which ultimately undermine the riskier Aussie. Looking ahead, traders are closely watching the upcoming US data, including the JOLTs Job Openings for October.
Moreover, Federal Reserve officials Adriana Kugler and Austan Goolsbee are scheduled to speak, providing further insights into monetary policy. On the Australian side, the third-quarter GDP figures, due for release on Wednesday, could offer more direction for the Aussie.
Mixed Economic Data Creates Volatility for AUD/USD Pair
On the data front, Australia’s current account deficit for the third quarter came in higher than expected, reaching A$14.1 billion. This was an improvement from the A$16.4 billion deficit in the second quarter, which was revised from a previous figure of A$10.7 billion.
The result was worse than analysts’ forecast of a A$10.0 billion shortfall. Meanwhile, Australia’s retail sales grew by 0.6% in October compared to a 0.1% rise in September. This beat expectations of a 0.3% increase, indicating stronger consumer spending.
On the US front, the ISM Manufacturing PMI rose to 48.4 in November from 46.5 in October, showing a stronger-than-expected recovery. This was above the market’s forecast of 47.5, signaling some improvement in the manufacturing sector.
On the Fed’s side, there were mixed signals regarding future rate cuts. Atlanta Fed President Raphael Bostic said he's unsure if a rate cut is needed in December but believes rates should be lowered in the months ahead.
Meanwhile, New York Fed President John Williams suggested that more rate cuts could be necessary to bring policy to a neutral stance, now that inflation and employment risks are more balanced.
Fed Governor Christopher Waller also indicated he was leaning towards supporting a rate cut in December, expecting inflation to continue easing toward the Fed's 2% target.
The stronger US manufacturing data and mixed Fed signals could add pressure on the AUD/USD pair, increasing volatility.
Therefore, the mixed data, with a higher-than-expected current account deficit in Australia and stronger US manufacturing data, could weigh on the AUD/USD pair. The uncertainty around Fed rate cuts and Australia's retail sales boost may limit AUD losses, leading to volatility.
AUD/USD – Technical Analysis
The AUD/USD pair dipped slightly, trading at $0.64696, down 0.07% for the session. The price action has remained below the pivot point of $0.65259, signaling ongoing bearish momentum on the 4-hour chart.
The pair's proximity to the 50 EMA, which is currently at $0.64931, highlights a consolidation phase, though sellers maintain a slight edge.
Immediate resistance lies at $0.65575, with further levels at $0.65973. These levels represent potential barriers for any corrective upward moves. Conversely, immediate support is located at $0.64497, a breach of which could extend losses toward $0.64154 and $0.63763.
The RSI, currently at 42, underscores the bearish tone, indicating that selling pressure is outweighing buying interest but has yet to reach oversold territory.
The technical structure favors a short-term sell strategy, particularly if prices remain below $0.64813. A suggested trade setup involves entering short positions below this level, targeting a move toward $0.64150, while managing risk with a stop-loss at $0.65328.
This approach aligns with the pair’s downward trajectory and the broader bearish market sentiment.
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