AUD/USD Price Analysis – Nov 21, 2024

Daily Price Outlook

During the European trading session, the AUD/USD currency pair continued its upward trend, trading near the 0.6520 level.

This rise was due to a weaker tone in the US Dollar, as buyers stepped back to assess US President-elect Donald Trump's proposed policies before making new moves.

Moreover, the recent market reaction to Russian President Vladimir Putin’s approval of a lower threshold for nuclear strikes initially caused concern. However, this quickly faded after comments from both Russian and US officials eased fears of a nuclear conflict.

This helped boost market sentiment, which in turn put pressure on the safe-haven USD, benefiting risk-sensitive currencies like the Australian Dollar.

RBA's Hawkish Stance Boosts AUD/USD as Inflation Concerns Support Australian Dollar

Furthermore, the upticks in the AUD/USD pair gained extra support from the Reserve Bank of Australia's (RBA) recent comments. However, the RBA has maintained a hawkish stance, which means it is focused on keeping inflation under control by using stricter monetary policies.

This approach has been helping the Australian Dollar remain strong against other currencies, including the US Dollar.

Earlier this week, the RBA's November meeting minutes showed that the board is concerned about rising inflation. They highlighted the need to keep interest rates high to prevent inflation from getting worse.

This cautious approach from the RBA reassures investors and boosts confidence in the AUD. Together with the overall positive market mood, this has helped lift the AUD/USD pair.

US Dollar Faces Bearish Pressure Amid Policy Uncertainty and Market Sentiment, Capping AUD/USD Gains

On the US front, the broad-based US dollar was unable to maintain its upward trend and turned bearish due to a softer market tone. Traders have decided to wait on the sidelines for more clarity on US President-elect Donald Trump’s proposed policies before making fresh moves.

Despite this, the expectations that the Federal Reserve (Fed) may adopt a less dovish stance are still supporting the USD. The market is now pricing in a 50% chance that the Fed will cut interest rates by 25 basis points in December, mainly due to concerns that Trump's potential tariffs and tax cuts could push inflation higher.

This outlook is supporting US Treasury bond yields, which is encouraging some buying of the USD. As a result, this keeps a lid on the upside potential for the AUD/USD pair. Traders are now waiting for US economic data and comments from key Federal Reserve officials for further direction.

AUD/USD - Technical Analysis

The AUD/USD is trading at $0.65119, up 0.10% in the 4-hour timeframe, as the pair shows signs of recovery from earlier lows.

The pivot point at $0.65456 serves as a key level to watch, with a bullish breakout above this potentially opening the door to immediate resistance at $0.65918.

Further upside targets include $0.66399, aligning with improving market sentiment for the Australian dollar amid recent positive economic data.

On the downside, immediate support is located at $0.64497, followed by $0.64154 and $0.63763, where buyers may step in if the pair experiences any pullbacks. The 50-day EMA at $0.64945 is acting as a critical support level, reinforcing the bullish outlook while keeping short-term risks contained.

The RSI at 54 reflects neutral momentum, indicating room for both upside or downside movements depending on broader market catalysts.

Traders should monitor any break above $0.65456 for confirmation of further gains, while a drop below $0.64896 could negate the current upward bias and bring the $0.64497 support level into play.

For a strategic approach, an entry above $0.64895 is recommended, with a stop loss at $0.64503 to minimize downside risks. Profit targets are set at $0.65463 and potentially higher levels if resistance is breached.

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