AUD/USD steadies around 0.6670 due to an upbeat mood, ahead of Aussie’s Consumer Confidence, US CPI

• AUD/USD currently trades at around the 0.6670 level, with the pair showing signs of stability following a volatile Monday session.
• US employment report indicates a tight labor market, with Average Hourly Earnings (AHE) rising and the Unemployment Rate edging lower. These data sets could justify further tightening action from the US Federal Reserve (Fed).
• Amid comments from Fed officials about the need for further rate hikes to control inflation, the AUD/USD managed to hold its ground.

AUD/USD hovers around the 0.6670 region as the Asian session begins, following Monday’s volatile session, with the pair unable to get a clear direction, though closed below solid resistance of the 50 and 20-day Exponential Moving Averages (EMAs), each at 0.6686/82. The AUD/USD exchanges hands at 0.6677.

Despite closing below key moving averages, AUD/USD shows signs of stability. US Federal Reserve comments and Australian economic data in focus

Wall Street finished with gains, an improvement in market sentiment. The last week’s US employment report, although mixed with the economy adding just 209K jobs, witnessed Average Hourly Earnings (AHE) rising while the Unemployment Rate edged lower. Hence it suggests the labor market remains tight, warranting further action by the US Federal Reserve (Fed)

The central bank bonanza continued amid the lack of economic data in the docket. Cleveland Fed President Loretta Mester commented that the economy is still robust while saying, “When the economy reopened, labor demand well outpaced labor supply, putting upward pressure on wages and price inflation.” She stated, “More hikes needed to bring inflation back down to target.”

Echoing some of her comments was the San Francisco Fed President Mary Daly, stating there’s more to be done, opening the door for a couple of hikes. She added that inflation and growth risks became more “balanced,” but the chances of doing too little outpace the threats of overtightening.

Even though the comments were hawkishly tilted, the AUD/USD failed to dive further, with the pair gaining traction. The Australian economic docket will feature the Westpac Consumer Confidence report for July; at the same time, the National Australia Bank’s reveal Business Conditions and Confidence.

Regarding the US economic agenda, further Fed speakers will be featured ahead of Wednesday’s US inflation data.

AUD/USD Price Analysis: Technical outlook

The AUD/USD trades nearby the confluence of the 20 and 50-day EMAs, with resistance levels ahead of the 0.6700 figure. It should be said that a breach of that area will expose the 200-day Exponential Moving Average (EMA) at 0.674, which could be seen as a bullish signal that could lift prices to the 0.6800 mark.

Nevertheless, the AUD/USD path of least resistance is downwards, as shown by the Relative Strength Index (RSI), which remains bearish territory. That, alongside strong resistance above the current exchange rates, could pave the way to test the July 6 daily low of 0.6599, ahead of testing the May 30 daily high at 0.6559.