The Australian Dollar (AUD) depreciated against the US Dollar (USD) on Friday, largely influenced by dovish remarks from Reserve Bank of Australia’s (RBA) Deputy Governor Andrew Hauser. Hauser cautioned against making policy decisions based on single inflation reports, stressing the need for comprehensive analysis of forthcoming economic data, according to Bloomberg.
Earlier, the AUD had strengthened following May's unexpectedly high Monthly Consumer Price Index (CPI) release, fueling speculation that the RBA might raise interest rates again in August due to persistent high inflation.
Meanwhile, the US Dollar (USD) saw gains supported by higher yields on US Treasury bonds. Friday’s Core PCE Price Index inflation is expected to decrease year-over-year to 2.6% from the previous 2.8%, a key metric watched by the Federal Reserve (Fed).
From a technical standpoint, the Australian Dollar traded around 0.6630 on Friday, indicating a neutral bias for the AUD/USD pair as it consolidates within a rectangle formation on the daily chart. The 14-day Relative Strength Index (RSI) at 50 suggests neutral momentum. Support for the pair is observed around the 50-day Exponential Moving Average (EMA) at 0.6618, with potential downside testing towards the lower boundary near 0.6585 on a break below.
Resistance levels are anticipated near the upper boundary of the rectangle formation around 0.6695, approaching the psychological barrier at 0.6700, and further at 0.6714, marking the highest level since January.
AUD/USD: Daily Chart
Paraphrasing text from "FX Street" all rights reserved by the original author.
