Home AUD/USD Price Analysis: Risk-on Sentiment Weighs on Dollar
AUD/USD Daily Outlooks

AUD/USD Price Analysis: Risk-on Sentiment Weighs on Dollar

  • Investors anticipate an upcoming speech by Federal Reserve Chair Jerome Powell.
  • Australian supermarkets will likely report stronger full-year earnings.
  • Interest rates in Australia have risen by 400 basis points since May last year.

Today’s AUD/USD price analysis is bullish. On Tuesday, the dollar eased from its recent 10-week highs due to a rebound in global risk sentiment. This came from increased US government bond yields. 

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Fiona Cincotta, senior markets analyst at City Index in London, remarked, “We’re observing a moment of pause. The dollar has experienced a robust rally, and today there’s a cautious sense of optimism.”

Moreover, the dollar’s overall movement will likely be slow in anticipation of an upcoming speech. Federal Reserve Chair Jerome Powell will speak at the central bank symposium in Jackson Hole, Wyoming. “So much hinges on Powell’s remarks regarding the duration of higher rates,” said Cincotta, discussing the dollar’s prospects.

Meanwhile, boosted by the improved global risk sentiment, the Australian dollar gained 0.4%. This followed a drop to a 9.5-month low of $0.6365 on the previous Thursday.

Kristina Clifton, senior currency strategist at the Commonwealth Bank of Australia, noted that a significant Chinese stimulus package focusing on commodity-heavy infrastructure spending would likely be required to reverse the AUD/USD currency pair’s downward trend. 

Elsewhere, Australian supermarkets will likely report stronger full-year earnings due to elevated inflation impacting shelf prices. However, analysts were attentive to the outlook for consumer behavior, given rising borrowing costs and expenses. 

Interest rates in Australia had risen by 400 basis points since May of the previous year. Consequently, it has led to higher monthly mortgage payments and decreased consumer spending. 

AUD/USD key events today

The US will release the existing home sales report for July. This report will give a recent picture of the US labor market and the broader economy.

AUD/USD technical price analysis: Bulls are eyeing the 0.6500 resistance level.

AUD/USD technical price analysis
AUD/USD 4-hour chart

AUD/USD is bullish on the charts as the price now trades above the 30-SMA. Furthermore, bullish momentum is strong, with the RSI trading above 50. Bears had been in charge previously but failed to trade below the 0.6400 support level.

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With the price above the 30-SMA, we will likely see a retest of the 0.6500 resistance level. Bulls will confirm a reversal if they can keep the price above the 30-SMA, respecting it as support.

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Saqib Iqbal

Saqib Iqbal

Saqib Iqbal is a market analyst, prop fund trader and mentor, serving the industry with his analysis and educational content since 2011. The author has great exposure to different financial markets and institutions. He's well-known for his day trading reviews and multiple timeframe analysis.