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AUDUSD Forecast – Higher as Investors Shrug Off Weak PMI Data Ahead of Fed Minutes

By:
James Hyerczyk
Updated: Nov 23, 2022, 09:33 UTC

Investors are looking ahead to the publication of minutes from the Fed's November meeting, seeking clues on the direction of monetary policy.

AUDUSD

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The Australian Dollar is slightly higher following the release of economic data that showed Australian private sector output contracted for a second consecutive month in November. According to the S&P Global Flash Australia Composite Output Index fell from 49.8 in October to 47.7 in November.

Traders are now bracing for the release of the minutes from the Federal Reserve’s November meeting at 19:00 GMT that should offer some insight into whether policymakers believe the central bank should slow the pace of future rate hikes. Given the recent remarks from Fed officials, the minutes are likely to show rates will continue to rise until inflation is under control.

At 07:00 GMT, the AUD/USD is trading .6649, up 0.0001 or +0.01%. On Tuesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $65.76, up $0.40 or +0.61%.

Traders are also facing a plethora of U.S. economic data including Durable Goods, Weekly Unemployment, Flash Manufacturing and Non-Manufacturing and New Home Sales.

Additionally, the University of Michigan will release fresh data on Consumer Sentiment and Inflation Expectations.

Volume could be on the light side because of Thursday’s U.S. bank holiday so don’t be surprised by exaggerated reactions to the reports.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .6798 will signal a resumption of the uptrend. A move through .6386 will change the main trend to down.

The main range is .6916 to .6170. The AUDUSD is currently trading on the strong side of its retracement zone at .6631 to .6543, making it support.

The minor range is .6798 to .6585. Its 50% level at .6692 is the nearest resistance.

The AUDUSD is also trading inside a long-term retracement zone at .6760 to .6466.

Daily Swing Chart Technical Forecast

Trader reaction to the main Fibonacci level at .6631 is likely to determine the direction of the AUDUSD on Wednesday.

Bullish Scenario

A sustained move over .6631 will indicate the presence of buyers. This could generate the momentum needed to challenge .6692. Overtaking this level could extend the rally into .6760.

Bearish Scenario

A sustained move under .6631 will signal the presence of sellers. Taking out this week’s low at .6585 will indicate the selling is getting stronger with .6543 the next major target. This is a potential trigger point for an acceleration into .6466.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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