The previous 3-day winning streak of the Australian dollar rate ended this Tuesday. The US dollar’s sudden rise has pushed the Aussie currency aside, shifting the trajectory of the AUD/USD rate. There have been some supporting pillars for the Aussie for the past few days, including retail sales info before the upcoming Fed decisions. Moreover, the RBA is going to release its own policy decisions on interest rates soon enough in a week’s time, further affecting a future trajectory. All of this means this pair will likely experience significant headwinds this coming week.
Analysts are expecting the RBA to raise rates by 0.25% as inflation keeps rising. This should have a positive effect on the value of the Australian dollar exchange rate. Furthermore, the CPI has shown that there has been growth in the previous quarter of 2023, greater than that of the second quarter.
Meanwhile, the US dollar has made a recent recovery after some losses, as the US dollar index shows for Monday. The release of key economic data points failed to make a significant shift this Friday due to high interest rates. However, there still seems to be some positivity in the markets that helped boost the Greenback for this Monday. The Fed decisions this coming week will doubtless have further impacts.
The Australian dollar rate now hangs around a price point near 0.6350 against the US dollar, a potential key level of support. The lowest point this year was 0.627. Therefore, a drop-down to somewhere as low as 0.625 does not seem implausible for the time being.
However, this all depends on the AUS dollar rate’s performance in the coming weeks. It is a currency stuck below a major resistance point of 0.64. The 50-day EMA is at 0.6405. If the US dollar manages to breach this point, we could see a significant positive swing for the currency.
