The recent drop in the CB Consumer Confidence Index below 100 for the first time since July 2022 has raised concerns among investors. Chief Economist Dana M. Peterson attributed this decline to consumer worries about inflation. This development underscores the importance of monitoring FOMC member commentary for insights into inflation, economic outlook, and potential Fed interest rate adjustments.
The near-term trends of the AUD/USD currency pair are likely to be influenced by upcoming Australian and US inflation data. A scenario where Australian inflationary pressures increase while US inflation remains subdued could shift the monetary policy divergence in favor of the Australian dollar. Additionally, the possibility of an RBA rate hike combined with expectations of a Fed rate cut could further bolster the AUD/USD towards the $0.70 level.
The AUD/USD pair has maintained positions above both the 50-day and 200-day Exponential Moving Averages (EMAs), supporting a bullish outlook. A break above the $0.67003 resistance level could pave the way for a move towards $0.67500, with potential further upside towards the $0.67967 resistance level. Conversely, a drop below the $0.66500 mark could signal a breach of the 50-day EMA, potentially leading to a test of the 200-day EMA and the $0.65760 support level.
Investors are advised to closely monitor Australian and US consumer confidence data, as well as Fed commentary, to gauge the future direction of the AUD/USD pair. Additionally, keeping an eye on the technical indicators such as the 14-period Daily Relative Strength Index (RSI) reading, which currently stands at 53.57, can provide valuable insights into potential price movements. The AUD may target the $0.67500 level before reaching overbought territory, indicating the need for a cautious approach in trading decisions.