Technical Analysis

AUD/USD Price Analysis – Nov 28, 2024

By LonghornFX Technical Analysis
Nov 28, 20244 min
Audusd

Daily Price Outlook

During the European trading session, the AUD/USD currency pair managed to halt its downward trend and regained some traction around the 0.6505 level, reaching an intraday high of 0.6510.

This uptick was largely driven by a brief bounce in the US Dollar, which had fallen to a two-week low previously. However, the US dollar quickly regained positive momentum, aided by recent US economic data.

The data highlighted a resilient economy and slower progress in inflation, which suggests that the Federal Reserve may adopt a more cautious approach towards further rate cuts. This outlook helped lift US Treasury yields, boosting demand for the USD and putting some pressure back on the AUD/USD pair.

US Dollar Rebounds on Strong Economic Data and Inflation Outlook, Pressuring AUD/USD

On the US front, the broad-based US dollar maintained its upward trend and bounced back from a two-week low, thanks to stronger economic data.

The US economy showed resilience with signs of slowing inflation, which suggests that the Federal Reserve might be more cautious about cutting interest rates further. This helped push US Treasury bond yields higher, boosting demand for the dollar.

On the data front, the latest US economic reports played a key role in this shift. The Personal Consumption Expenditures (PCE) Price Index rose to 2.3% in October, up from 2.1% in September.

The core PCE, which excludes food and energy prices, also saw a slight increase, rising to 2.8% from 2.7%. Meanwhile, US GDP grew at a healthy 2.8% annual rate in the third quarter, driven by strong consumer spending, which rose by 3.5%. Jobless claims also fell by 2,000 to 213,000, signaling a solid labor market.

However, there was a slight disappointment with October's Durable Goods Orders, which only rose by 0.2%, missing expectations of a 0.5% increase.

Excluding transportation, the rise was even smaller, at 0.1%. Despite this, concerns over inflation and the potential impact of future policies under President-elect Donald Trump, combined with the latest Federal Reserve minutes, gave the dollar an edge.

The rebound in US Treasury yields also helped support the dollar, putting some upward pressure on AUD/USD pair.

AUD/USD Faces Pressure Amid Economic Concerns and Global Tensions, But RBA's Hawkish Stance Provides Support

On the other hand, the gains in the AUD/USD pair were also supported by stronger-than-expected data on Private Capital Expenditure in Australia. Australia's new capital expenditure rose by 1.1% in the third quarter, surpassing market expectations of a 0.9% increase.

This rebound followed a 2.2% decline in the previous quarter, showing some strength in the Australian economy. However, despite this positive data, the Australian Dollar remained subdued against the US Dollar, partly due to reduced trading activity ahead of the US Thanksgiving holiday.

Looking ahead, the AUD/USD pair may face downward pressure as the US plans to introduce new measures aimed at limiting China’s progress in artificial intelligence technology.

Given the strong trade links between Australia and China, any economic changes in China could have a significant impact on Australian markets, possibly weakening the Australian Dollar.

Furthermore, the market sentiment was dampened after President-elect Donald Trump's announcement of a 10% tariff hike on all Chinese goods entering the US.

However, the downside for the AUD was limited by the Reserve Bank of Australia's (RBA) hawkish stance on future interest rates. Australia's monthly Consumer Price Index (CPI) rose by 2.1% year-over-year in October, staying within the RBA's target range of 2-3%.

Although this was slightly below expectations of 2.3%, it marked the lowest inflation rate since July 2021 and helped support the Australian Dollar in the face of global economic concerns.

AUD/USD Price Chart - Source: Tradingview
AUD/USD Price Chart - Source: Tradingview

AUD/USD – Technical Analysis

AUD/USD is trading at $0.64824, down 0.21%, as bearish sentiment continues to dominate below the $0.65014 pivot point. The 4-hour chart indicates immediate resistance at $0.65918, with additional barriers at $0.66399.

The 50-day EMA at $0.64987 reinforces short-term resistance, limiting upward momentum. A breakout above $0.65456, the key pivot level, would be required to shift the bias toward bullish territory, potentially targeting $0.65918 and beyond.

On the downside, immediate support is found at $0.64497, with further declines targeting $0.64154 and $0.63763. The RSI at 48 suggests a neutral stance, leaning slightly bearish, with no immediate oversold signals. However, continued pressure below the pivot could drive the pair toward lower support zones.

Current trends suggest sellers remain in control, especially if the price sustains below $0.65052. Traders are advised to consider selling below this level, with a take-profit target at $0.64488 and a stop-loss at $0.65504 to manage risk.

The short-term outlook hinges on whether AUD/USD can break above the $0.65456 pivot.

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AUD/USD

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