The Australian Dollar seems to have held its ground after China’s PMI data was released on Friday. This could be attributed to the hawkish sentiment surrounding the Reserve Bank of Australia’s potential rate hikes in the near future. The fact that the Australian Dollar did not depreciate significantly despite the disappointing PMI figures from China indicates a certain level of resilience in the currency.
RBA Assistant Governor Sarah Hunter’s recent comments regarding inflationary pressures and the RBA board’s concerns about inflation staying above the target range of 1%-3% are key factors to consider. This suggests that the RBA may be more inclined towards a hawkish stance, potentially leading to rate hikes in the future. These statements could have influenced the Australian Dollar’s performance positively.
Despite lower US Treasury yields, the US Dollar managed to rebound, signaling strength in the currency. The anticipation of Core PCE data may have played a role in supporting the US Dollar’s upward movement. It remains to be seen how the Core PCE data will impact the currency in the coming days.
Looking at the technical analysis of the AUD/USD pair, it appears that there is a bullish bias for the currency pair. The pair is consolidating within a rising wedge pattern, with the RSI confirming a bullish outlook. The psychological level of 0.6700 could be the next target for the pair, followed by the four-month high of 0.6714. However, the pair may face some resistance at these levels and could potentially retreat towards the support levels at 0.6600 and 0.6588.
The Australian Dollar seems to be holding steady despite external factors such as China’s PMI data and the US Dollar’s performance. The RBA’s stance on inflation and rate hikes, along with technical analysis of the AUD/USD pair, suggest a possible upside for the Australian Dollar in the near term. It will be interesting to see how these factors play out and influence the currency’s performance in the coming days.