Aussie Dollar remains above 0.7000 ahead of Fed, RBA and inflation tests

• A 0.11% rise leaves AUD/USD higher despite a firmer US Dollar and choppy trading.
• The probability of a December Fed rate increase climbs to 82% before Warsh's press conference.
• An acceleration in Australian CPI inflation could strengthen expectations of further RBA tightening.

A modest 0.11% gain accompanies the Australian Dollar's fourth consecutive day of consolidation against the US Dollar, with trading becoming choppy before the Federal Reserve's monetary policy announcement. Despite a full US economic calendar, markets showed little response. Attention is now turning to Australia's Consumer Price Index (CPI) release.

AUD/USD holds around 0.7024 ahead of key policy guidance from both central banks

Despite broader gains for the US Dollar, AUD/USD stands at 0.7024 at the time of writing. A 0.36% advance has taken the US Dollar Index (DXY), which tracks six currencies against the US dollar, to 102.16.

US Consumer Confidence, as measured by the Conference Board (CB), rose to 91.7 in October from September's 82.2, beating expectations. An increase of 1.8% in Durable Goods Orders followed September's 0.1% rise. Meanwhile, ADP Employment Change came in at 16.8K, down from the preceding 17.5K reading.

A series of central bank events, with the Fed taking centre stage, is occupying market participants. Although the US central bank is expected to leave interest rates on hold, the probability of a 25-basis-point increase in December stands near 82%. Fed Chair Kevin Warsh's subsequent press conference would determine whether the FOMC is considering a further rate rise this year or deferring it until 2027.

Thursday also brings the Core Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred inflation measure. Should that reading prove strong and US Gross Domestic Product (GDP) indicate continued economic resilience, the case for a December rate rise could become more firmly established.

Australia's calendar includes remarks from Reserve Bank of Australia (RBA) Governor Michele Bullock alongside September's CPI release. Forecasts put trimmed mean inflation at 0.3% MoM, a tenth above the previous month's 0.2%. An annual CPI reading above August's 3.6% would pave the way for additional tightening.

AUD/USD Price Forecast: Pair retains a modest bearish technical bias

Trading at 0.7028 on the daily chart, AUD/USD remains below the 50-, 100- and 200-day simple moving averages (SMAs), which converge around 0.7072. This leaves the near-term outlook mildly bearish. Broken rising trend-line levels at 0.7105 and 0.7455 also sit above the current price, pointing to overhead supply. However, a Relative Strength Index (RSI) reading of 52.6 suggests momentum is improving slightly rather than signalling outright weakness.

The SMA convergence near 0.7072 provides the first resistance on any advance. Beyond it lie the broken upward trend line around 0.7105 and the more substantial horizontal resistance at 0.7198. Support initially comes from the rising trend line near 0.6920, followed by the older downward trend-line break around 0.6353. The current area of 0.7028 serves as a near-term pivot; sellers retain the advantage unless AUD/USD decisively recovers the 0.7070/0.7110 zone.

(The technical analysis of this story was written with the help of an AI tool. Know more.)