AUD/USD stand firm above 0.6500 with markets bracing for Aussie PPI, US inflation
■AUD/USD steady after a 0.33% gain Thursday, spurred by US GDP and rising inflation.
■Market now expects the first Fed rate cut in November, not September, based on latest economic data.
■Investors eye upcoming Australia PPI and US Core PCE figures for more market direction.
The Aussie Dollar begins Friday’s Asian session on the right foot against the Greenback after posting gains of 0.33% on Thursday. The AUD/USD advance was sponsored by a United States report showing the economy is growing below estimates while inflation picked up. The pair traded at 0.6518, virtually unchanged.
AUD/USD reflects continued market reaction to US data
Wall Street ended Thursday’s session with losses, which usually could’ve affected the Forex markets, but it didn’t. The US Dollar is under pressure following the release of a softer-than-expected GDP report, which, coupled with a surprise on a higher Core Personal Consumption Expenditure Price Index (PCE) on a quarterly basis, spurred investors to priced out rate cuts by the Fed.
Market pricing for the Fed's first 25 basis point (bps) rate cut was pushed back from September to November.
Other US data revealed that the labor market is still solid. There were 207 K Americans filing for unemployment claims, below estimates of 214K and the previous reading of 212 K.
AUD/USD traders sent the pair sliding towards its daily low of 0.6485 before recovering some ground. As Friday’s session begins, they will be eyeing the release of the Producer Price Index (PPI) in Australia and the US Core PCE figures on a monthly basis during the North American session.
AUD/USD Price Analysis: Technical outlook
Despite registering gain for the fourth straight day, the AUD/USD remains bearishly biased, with price action at 0.6525 below the 50 and 200-day moving averages (DMAs). If bulls gather momentum and push prices above that level, up next would be the 100-DMA at 0.6585, standing on their way to 0.6600. Conversely, further weakness could drag the pair below 0.6500. This paves the way for subsequent losses, with the next key support level at 0.6442, followed by the year-to-date (YTD) low at 0.6362.
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