Aussie Dollar - The AUD/USD currency pair remains under pressure in the Asian trading session due to investor concerns about potential deflation in China and comments from Federal Reserve officials favoring interest rate hikes. This major currency pair is currently trading around 0.6525, up 0.14% today.
 
However, Mary C. Daly, President of the Federal Reserve Bank of San Francisco, stated on Thursday that there is still more information to evaluate, making it too early to predict whether additional interest rate hikes or a prolonged period of rates will be needed.
 
In light of these events, there are limitations to the Aussie’s strengthening, which serves as a factor hindering this currency pair. On Friday, market participants are awaiting the release of the U.S. Producer Price Index (PPI), scheduled for the American trading session.
 
It is expected that the figure will rise from 0.1% to 0.7% year-over-year (YoY). Additionally, the University of Michigan Consumer Sentiment Survey (UoM) will also be announced during the American trading session.
 
From a technical perspective, the AUD/USD is trading below the 50 and 100 Exponential Moving Averages (EMA) on the four-hour timeframe, with a downward trend indicated. This suggests that the dominant resistance trend for this currency pair is downward.
 
If significant buying occurs above 0.6540 (the midpoint of the Bollinger Band), there may be an opportunity to reach the next resistance level at 0.6575. At this level, there is a confluence of the upper Bollinger Band and the 50 EMA on the hourly timeframe.
 
If a breakout occurs above this level, the next step could lead to a resistance stop at 0.6620 (the 100-hour EMA), and ultimately, a significant barrier is seen at 0.6700 (a round number with psychological significance).
 
On the downside, the 0.6500 level serves as a critical support level for this currency pair. This figure reflects the lower boundary of the Bollinger Band, the lowest level reached on August 3, and carries psychological significance.
 
Any intraday correction below this level will reveal the next battleground at 0.6460 (the lowest point on May 31).
 
Further south, the next stopping point for the AUD/USD today is at 0.6400 (where a round psychological number meets the lowest point from November 2022).
 
It is noteworthy that the Relative Strength Index (RSI) is below 50, which challenges the continuation of direct declines for this currency pair at this time.
 
Warning!
 
This analysis is based on fundamental and technical views from reliable sources and is not intended as advice or solicitation. Always remember that this content aims to enrich the reader's information. Always conduct independent research regarding other forex information as a reference for your trading.
 
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