FX.co ★ GokBoruHunter | AUD/USD

AUD/USD Daily Outlook Update AUD/USD is moving down toward 0.7160 in the first hour of Monday's Asian session. Positive inflation data from the United States is providing some support for the US dollar (USD) relative to the Australian dollar (AUD). All eyes will be on the US Fed's rate announcement on Wednesday. US CPI climbed by 0.4% MoM in August, leading to an annual increase of 3.4%, as per the Bureau of Labor Statistics on Friday. Both numbers matched market expectations. The Reserve Bank of Australia's (RBA) hardline stance could help restrain further losses for the Australian dollar. As RBA Assistant Governor Sarah Hunter reported on Tuesday, if inflation persists longer than expected, the bank might have to raise interest rates again in September. Strategists at UOB Group say the intermediate-term outlook for USD/AUD remains valid despite the reversal in prices seen in recent sessions. As UOB explains, "ever since last Friday, when the spot rate was 0.7205, we were of the opinion that AUD could edge higher but any upward move will be limited to 0.7160-0.7240 trading range." After the pair "edged higher for several days and reached its high of 0.7238 two days ago," UOB adds that AUD "plummeted and ended 0.83% lower at 0.7157 yesterday." As UOB points out, the "sudden rise in downward momentum signals that AUD could fall to 0.7120." This signals a shift in short-term sentiment from positive to negative. Nevertheless, UOB also mentions that if AUD "surpasses 0.7210 ('strong resistance' level), it will imply that it continues to trade in a range.

AUD/USD is trading above the 100-day moving average (MA) and the lower Bollinger Band on the daily chart, suggesting a favorable near-term outlook, even as price probes the level below the middle Bollinger Band. The RSI (14), standing at 54, is marginally bullish. In terms of topside resistance, an imminent one can be expected in the middle Bollinger Band at 0.7170, after which upside efforts might falter, while the resistance will shift up to the upper Bollinger Band at 0.7235. Meanwhile, on the downside, immediate support is the lower Bollinger Band at 0.7100, before reaching the 100-day MA at 0.7080.