• The Australian dollar (AUD) has shown remarkable strong-arm character in the currency market. On Thursday, it tested intraday highs around the 0.6630 region. This upward trend comes amid continuing strong inflation results out of the United States. These figures have really shaken up the currency trading landscape. Prime AUD/USD rate reversed course in the beginning of the American session. It recovered sharply from an intraday low of 0.6590 with robust bullish sentiment evident among traders.
Throughout the trading day, AUD/USD was able to trade up to 0.6635 high seen earlier this week. This movement truly set the stage for today’s resistance. The bullish trend is gaining momentum, supported by a steadfast 20 Simple Moving Average (SMA) on the 4-hour chart. Such support has proven effective at attracting bidders any time the price retreats. As of this writing, the pair is up 0.21% on the day versus the U.S. dollar, indicating bullish short term momentum.
In recent trading sessions, the AUD has similarly shown strong mixed performance against other currencies. It has dropped by 0.04% lower compared to the New Zealand dollar (NZD). It’s gone down by 0.14% relative to the British pound (GBP). The Australian dollar is stronger so far by 0.24% to the Japanese yen (JPY). It has lost 0.26% against the loonie (CAD).
In August, year-over-year inflation as measured by the Consumer Price Index (CPI) within the United States surged to 2.9%. On a monthly basis, CPI increased 0.4% since September. This figure is noteworthy, as it is a sharp increase from last month’s 0.2% growth, and it’s better than the expected 0.3%. As a result, this kind of information has a tendency to impact investor sentiment and expectations about what the Federal Reserve’s future monetary policy decisions will be.
The turn got worse when this time around the United States, initial jobless claims unexpectedly rocketed. For the week ending September 6, they reached 263,000. This spike is a significant sign of weakness in the labor market, which adds to the uncertainty of the economic outlook and is likely to weigh on dollar valuations.
Coincidently, Australia’s economic indicators are revealing the onset of inflationary pressures. Australia’s September Consumer Inflation Expectations soared to 4.7%, up sharply from 3.9% prior. Australia’s consumer price index has already been rising, with Australian consumers predicting more price increases in the near term. This hope might drive changes in economic policy.
Analysts forecast that if the AUD/USD continues to rise, it could go above the 0.6670 level. If this emerging move proves to be bullish, we could be approaching the vital mental hurdle of 0.6700. Traders would be looking at the developments at the home economic front. More importantly, they’ll need to be attuned to global developments as they steer through these currency convulsions.
Support levels are very important for the AUD/USD currency pair. Until then, watch the intraday low at 0.6590 and look for further support below at 0.6550. Any breach under these levels would expose ETH to even further downside selling pressure.