The Australian Dollar (AUD) extends its decline on Thursday. The stronger US Dollar (USD) amid rising speculation of a 25 basis points (bps) rate cut by the Federal Reserve (Fed) in November undermines the Aussie. Furthermore, Beijing’s attempt to stimulate the world’s second-largest economy disappointed investors as China’s top economic planning authority failed to announce additional measures to improve flagging growth. It’s worth noting that China is a major trading partner to Australia, and concerns about China’s sluggish economy tend to have a negative impact on the AUD value.
Investors will closely monitor the key US Consumer Price Index (CPI) inflation data, which is due later on Thursday. The headline US CPI is expected to show an increase of 2.3% YoY in September, while the core CPI inflation is estimated to show a rise of 3.2% YoY in the same report period. However, in case the report shows a softer-than-expected outcome, this could open the door for a jumbo Fed rate cut, which might weigh on the USD and cap the downside for AUD/USD.
Daily Digest Market Movers: Australian Dollar softens ahead of US CPI data
Technical Analysis: Australian Dollar remains vulnerable near the key support level
The Australian Dollar weakens on the day. Technically, the bullish outlook of the AUD/USD pair looks vulnerable as the pair hovers around the lower limit of the ascending trend channel and the key 100-day Exponential Moving Average (EMA) on the daily chart. If AUD/USD crosses below the mentioned levels, this could resume its downside. The downward momentum is reinforced by the 14-day Relative Strength Index (RSI) which is located below the midline near 41.20.
The crucial support level for AUD/USD emerges at 0.6700, representing the lower limit of the trend channel, the 100-day EMA and the psychological level. A breach of this level could pave the way to 0.6622, the low of September 11.
On the other hand, the high of September 6 at 0.6767 acts as an immediate resistance level of the pair. Further north, the next upside barrier is seen at 0.6823, the high of August 29, followed by 0.6942, the high of September 30.More By This Author:WTI Holds Below $73.50 As Middle East Tensions Ease Australian Dollar Gathers Strength After RBA Minutes AUD/JPY Price Forecast: Attracts Some Sellers Near 100.00, Further Consolidation Cannot Be Ruled Out
