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As sellers gain strength, the AUD/USD pair navigates through uneven trading. This week’s US inflation data and Fed dot plot are the main topics of interest. Mixed NAB business survey results are released by Australia.
The AUD/USD pair’s performance was uneven, with some bearish pressure and a sticky range around 0.6605. Following a slight increase on Monday, sellers returned to the market, causing this change. The two-day meeting of the Federal Reserve (Fed), which ends on Wednesday, and the release of the US May inflation statistics will be the main events this week.
On the Australian front, a mixed economic outlook with inflation stubbornly high might prompt the Reserve Bank of Australia (RBA) to delay cuts, which might limit losses for the Aussie.
On the US front, markets await the May Consumer Price Index (CPI) data due to be released on Wednesday. Fed’s two-day meeting, which began on Tuesday and will end on Wednesday, has gripped the market’s attention. Any fresh clue on their interest rate forecast might trigger volatility in markets. Guidance from an updated DOT Plot are anticipated as well.
NAB’s May business survey shows mixed results for Australia’s outlook as the business confidence dropped to a six-month low of -3 from 1 in April. Business conditions dipped slightly to 6, just below the long-term average while the Employment sub-component showed improvement. These indicators suggest the RBA should remain cautious about easing prematurely.
Following recent declines, the Relative Strength Index (RSI) continues to be below 50, supporting the bearish mood, while the Moving Average Convergence Divergence (MACD) prints red bars, reflecting a growing selling pressure.
Nonetheless, the positive outlook remains the same as the pair remains above the 100 and 200-day SMA at approximately 0.6550, suggesting an overall positive trend.
