The AUD/USD pair is experiencing slight losses on Tuesday, hovering around the 0.6605 mark. This downward pressure follows a brief rebound on Monday, as sellers return to the market ahead of the highly anticipated Federal Reserve (Fed) meeting conclusion and US May inflation data release on Wednesday.
While the Australian economic outlook remains mixed, with persistent inflation concerns potentially delaying Reserve Bank of Australia (RBA) rate cuts, the Aussie’s losses could be limited.
Market Movers: Aussie Eyes CPI and Fed Guidance
- US CPI Data: Market participants eagerly await the release of the US Consumer Price Index (CPI) data for May, which could influence the Fed’s policy decisions.
- Fed Meeting: The two-day Fed meeting, ending on Wednesday, has captured the market’s attention, with investors keenly anticipating fresh clues on the interest rate forecast and the updated dot plot.
- Mixed NAB Business Survey: The National Australia Bank’s May business survey reveals a drop in business confidence to a six-month low, but business conditions remain above the long-term average, suggesting a need for caution in easing monetary policy prematurely.
Technical Analysis: AUD/USD Holds Support Despite Pullback
Despite recent declines, the AUD/USD pair maintains support above the 100 and 200-day Simple Moving Averages (SMA) around 0.6550, indicating an overall positive trend. However, the Relative Strength Index (RSI) remains below 50, suggesting a bearish bias, and the Moving Average Convergence Divergence (MACD) is displaying red bars, indicating increasing selling pressure.
