AUD/USD frothing on Fed reaction, but sticking to the midrange near 0.6375
01.11.2023, 18:58

AUD/USD frothing on Fed reaction, but sticking to the midrange near 0.6375

  • The AUD/USD is churning chart paper around 0.6375 as markets digest the Fed's rate hold.
  • Fed holds rates steady at 5.25%, Powell says no decisions on future meetings.
  • Next Up: Australian September Trade Balance, US NFP Friday.

The AUD/USD is frothing in the middle range for Wednesday after the US Federal Reserve (Fed) held their policy rates at 5.25-5.5%, and markets will be turning towards Friday's US Non-Farm Payrolls (NFP) print.

The Aussie (AUD) rebounded against the US Dollar (USD) for the first day of November's trading, lifting from an early low of 0.6318 to tap an intraday high of 0.6394 and is now trading in the middle near 0.6360.

Powell speech: We have not made any decisions on future meetings

The US Fed held rates steady as many market participants expected, but a notable lack of change in the Fed's rate statement is knocking back the market's early bets of one last rate hike for 2023 in December.

Fed Statement comparison: November vs September

Up next for the Antipodeans will be Australia's Trade Balance figures due early Thursday; investors are anticipating a slight reduction in the Aussie Trade Balance from 9.64B to 9.4B.

After that the broader market will be turning eyes towards Friday's US NFP release, which will be taking on additional weight now that the Fed has directed their forward guidance to being limited to near-term data.

Jobs growth is expected to decline but still remain positive for the US, and Friday's NFP is forecast to print at 180K for October compared to September's print of 336K.

AUD/USD Technical Outlook

The Aussie continues to run into technical resistance near the 0.6400 handle as the 50-day Simple Moving Average (SMA) acts as a ceiling on price action near 0.6390, and the pair is cycling tightly in the midrange around the 21-day Exponential Moving Average (EMA).

AUD/USD bids remain firmly trapped in bear country in the medium-term, and a downside continuation through the 0.6300 handle will see the pair etching in twelve-month lows below 0.6270.

AUD/USD Daily Chart

AUD/USD Technical levels

 

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