AUD/USD struggles to maintain momentum as US inflation data at 0.3% core MoM strengthens the US Dollar, keeping the pair below key technical resistance levels.
Hot US October CPI (0.4% MoM headline vs 0.3% expected, core 0.3% vs 0.2%) revives fear of a 50 bps Fed hike in December, supporting the dollar and capping the Aussie despite intraday AUD strength. Westpac consumer sentiment fell to 78.2 from 80.4, the weakest since late 2022, hurting AUD. Technicals show a bearish bias below the 0.6910 trend-line and the 20-day EMA at 0.6962, though RSI near 39 suggests downside momentum is softening.
The hotter-than-expected October US CPI (0.4% headline vs 0.3% est., core 0.3% vs 0.2% est.) lifted expectations of a 50 bps Fed hike in December to around 9% per CME FedWatch, and the index held Tuesday's gains around 102.25. Further Fed-tightening repricing would support the dollar; if inflation fears fade, gains could reverse.
The Australian Dollar faces persistent bearish pressure as hotter-than-expected US October CPI data, printing at 0.3% core MoM, revives expectations for a 50 bps Fed rate hike in December. While the pair saw a modest 0.2% intraday gain, it remains capped below the 0.6910 trend-line and 20-day EMA of 0.6962, compounded by a decline in Australian consumer sentiment to 78.2.
The pair edged up about 0.2% in Asian trade, but hotter-than-expected US October CPI (0.4% headline, 0.3% core) raises the chance of a bigger Fed rate hike in December, which supports the US dollar and keeps the pair's outlook uncertain. A daily close above 0.6962 would be needed to ease bearish pressure.
Resistance sits at the broken trend-line near 0.6910 and the 20-day EMA around 0.6962. Below spot there is no well-defined indicator support, leaving the pair vulnerable to declines toward recent lows.
Above-expected October inflation (0.4% headline, 0.3% core) raised fears the Fed will hike by 50 bps in December instead of a smaller move, which tends to push the US Dollar Index higher; it held Tuesday's gains near 102.25.