- Data revealed minimal growth in Australia’s economy in the third quarter.
- The RBA might not need to implement further hikes.
- In the US, data indicated a more than 2-1/2-year low in US job openings in October.
In Wednesday’s AUD/USD price analysis, the Aussie showcased resilience despite data revealing minimal growth in Australia’s economy in the third quarter. This sluggish growth marked the eighth consecutive quarter of expansion but the slowest in a year. Notably, real GDP rose by 0.2% from July to September. This figure reinforced the argument that the Reserve Bank of Australia might not need to continue tightening its policy.
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Meanwhile, the annual GDP growth remained at 2.1%, showing little change from the previous quarter.
Moreover, the decline is viewed as a deliberate outcome of the Reserve Bank of Australia’s monetary tightening efforts to bring inflation back within its 2-3% target range. In October, inflation was recorded at 4.9%.
As a result, the Reserve Bank of Australia decided on Tuesday to maintain the current stance. The bank plans to assess the impact of the substantial 425 basis points increase in interest rates since May last year.
As such, market sentiment now leans towards the belief that the RBA might not need to implement further hikes, especially considering recent dovish shifts from the Federal Reserve and the European Central Bank.
Meanwhile, in the US, data indicated a more than 2-1/2-year low in US job openings in October. It is a strong indication that higher interest rates are dampening demand for workers. Additionally, the data revealed 1.34 job vacancies for every unemployed person in October, marking the lowest since August 2021.
AUD/USD key events today
- The US ADP non-farm employment change
AUD/USD technical price analysis: Rebound finds strong resistance at 0.6600
The bias for AUD/USD on the technical side is bearish because the price has made a lower low below the 30-SMA. At the same time, the RSI is in bearish territory below 50, supporting bearish momentum. However, bears found strong support at the 0.382 fib retracement level. This saw the price pull back to retest the recently breached 0.6600 key level.
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Still, bulls will not take control until the price exceeds the 30-SMA. Therefore, there is a high chance the price will make a lower high and bounce lower. The next target for the downtrend is at the 0.5 fib level, near the 0.6500 key level.
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