AUD/USD Price Analysis – Dec 26, 2024
Daily Price Outlook
During the European trading session, the AUD/USD pair struggled for the second day in a row on Thursday, weighed down by a stronger US Dollar and the Reserve Bank of Australia's (RBA) December meeting minutes.
The US Dollar bounced back after a steep decline, as Federal Reserve officials hinted at fewer rate cuts next year, pointing to a slowdown in easing inflation. This recovery pushed the dollar close to a two-year high, putting pressure on the Aussie and other Asian currencies.
US Economic Data and Fed's Stance Strengthen US Dollar, Weighing on AUD/USD Pair
On the US front, the broad-based US Dollar rebounded after a sharp sell-off, as Federal Reserve officials signaled fewer interest rate cuts next year due to a slowdown in the disinflation process. However, soft US PCE data have kept inflation concerns in check, leading to a mixed economic outlook.
According to the CME FedWatch tool, markets now expect a nearly 93% chance that the Federal Reserve will keep interest rates unchanged in January, maintaining the current range of 4.25%-4.50%.
US Durable Goods Orders for November came in weaker than expected, falling by 1.1% compared to the forecasted 0.4% drop. This follows an upward revision in October, which saw a 0.8% increase, up from an initial 0.2% gain.
Meanwhile, US Consumer Confidence dropped 8.1 points in December to 104.7, signaling that the earlier rebound in consumer confidence was not sustained.
Concerns over President-elect Trump’s economic policies, particularly around tariffs, have added to household worries about rising living costs.
These concerns were further reflected in the Federal Open Market Committee's projections, which suggested fewer rate cuts in 2025 due to persistent inflation pressures.
Cleveland Fed President Beth Hammack noted that she prefers to keep interest rates steady until there is more evidence of inflation heading back to the Fed’s 2% target.
Meanwhile, Chicago Fed President Austan Goolsbee revised his forecast for 2025, expecting fewer rate cuts than previously anticipated.
US core PCE inflation rose 2.8% year-over-year, slower than expected, while monthly inflation grew by just 0.1%, showing moderate price increases. This mixed data adds to the pressure on the AUD/USD pair.
Therefore, the mixed US economic data, along with expectations for fewer rate cuts, strengthens the US Dollar, putting downward pressure on the AUD/USD pair.
The market's uncertainty about inflation and interest rates further intensifies bearish sentiment for the Aussie Dollar.
AUD/USD – Technical Analysis
The AUD/USD is trading at $0.62369, up 0.07% in the last session, reflecting cautious market sentiment. The pair remains below the pivot point of $0.62511, signaling potential bearish pressure unless it breaks above this level.
Immediate resistance lies at $0.63068, followed by $0.63420 and $0.63812, which could act as key upside targets if the bullish momentum strengthens. On the downside, support is located at $0.62004, with additional levels at $0.61565 and $0.61090, which could be tested if selling pressure intensifies.
Technical indicators paint a mixed picture. The RSI is at 48, reflecting a neutral sentiment with a slight bearish inclination.
The 50-day Exponential Moving Average (EMA) at $0.62391 is near the current price, providing a dynamic resistance level that aligns with the broader downward bias. A failure to reclaim $0.62511 could result in a deeper pullback toward $0.62004 or lower.
The pair’s price action is likely to hinge on the $0.62511 pivot point. A sustained move above this level would indicate recovery potential, targeting $0.63068, while a rejection may confirm further downside. Traders may consider a sell limit order at $0.62518, targeting $0.62008, with a stop loss at $0.62853 to manage risk effectively.
Related News
- GOLD Price Analysis – Dec 26, 2024
JOIN LONGHORNFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.