AUD/USD Drops to $0.62369 Amid Fed Signals and Mixed U.S. Data

The Reserve Bank of Australia’s (RBA) December meeting minutes also contributed to bearish sentiment. The RBA expressed concerns over inflation trends, keeping expectations for aggressive monetary tightening subdued.

Fed’s Hawkish Stance and Mixed U.S. Data

The Federal Reserve’s cautious optimism about inflation led to a sharp rebound in the dollar. The CME FedWatch tool suggests a 93% probability of no rate change in January, maintaining the current 4.25%-4.50% range. However, November’s U.S. Durable Goods Orders fell by 1.1%, underperforming the expected 0.4% drop. This decline was partially offset by a stronger October revision, from 0.2% to 0.8%.

Consumer confidence also fell sharply in December, dropping by 8.1 points to 104.7, as Americans grapple with rising living costs and economic uncertainties. Core PCE inflation rose by 2.8% year-over-year but showed a slower monthly increase of 0.1%, keeping inflation concerns in check.

AUD/USD Price Analysis

The AUD/USD faces bearish pressure, hovering below the $0.62511 pivot point. Immediate resistance levels are identified at $0.63068, $0.63420, and $0.63812, which could limit recovery attempts. On the downside, support lies at $0.62004, with further risks at $0.61565 and $0.61090 if selling intensifies.

• RSI: At 48, indicating neutral sentiment with bearish undertones.

• 50-day EMA: At $0.62391, acting as a near-term resistance level.

Key Takeaways:

• U.S. Dollar gains momentum on Fed’s signals and mixed data.

• Immediate AUD/USD resistance: $0.63068; key support: $0.62004.

• A move above $0.62511 could signal recovery; rejection suggests further declines.