AUDUSD is starting an uptrend on its 4-hour chart, moving inside a rising channel connecting the highs and lows since September. Price is currently testing the channel support and might be due for a bounce, according to its technical indicators.
The 100 SMA is above the 200 SMA, which means that the path of least resistance is to the upside. Stochastic and RSI have both turned up from the oversold area and are moving higher, indicating that buyers are taking control.
In this case, AUDUSD could move back up to the channel resistance at the .7400 major psychological level. Weak buying pressure could take the pair up to at least the mid-channel area of interest at the .7300 mark or the moving averages.
AUDUSD Fundamental Factors
Earlier today, Australia reported stronger than expected quarterly PPI readings, suggesting that the strong pickup in producer price levels could put upward pressure on CPI later on. In addition, this eases fears of additional RBA rate cuts.
In the US, the advance GDP reading came in weaker than expected at 1.5% versus the projected 1.6% growth figure. This led traders to pare expectations of an actual Fed rate hike in December, although the FOMC hinted that they’re more likely to tighten than stay put.
Up ahead, personal spending and income data from the US could also spur huge moves for AUDUSD, along with the core PCE price index – the Fed’s preferred inflation measure. Strong data could renew expectations of a December liftoff while disappointing results could dash hopes, potentially leading to a sharp dollar decline.
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