AUD/USD: To trade sideways short term – OCBC

The Australian Dollar (AUD) saw a mild rebound amid broad USD softness after jobs data disappointed while AU GDP data held up, OCBC FX strategists Frances Cheung and Christopher Wong note.

Bullish momentum on daily chart fades

“This morning, RBA Governor Bullock reiterated ‘that it is premature to be thinking about rate cuts’. She explained that RBA board is seeking to balance reducing inflation in a reasonable timeframe and maintaining as many of Australia’s recent labour market gains as possible, with unemployment at a low 4.2%.”

“She also spoke about the drawbacks of prolonged periods of high inflation and how the current episode is disproportionately hurting lower income earners and young Australians.”

“Pair was last at 0.6725 levels. Bullish momentum on daily chart faded while decline in RSI moderated. Recent pullback have found an interim support at 0.6690/0.6700 (21 DMA, recent low). Decisive break may open room for further downside towards 0.6640. Resistance at 0.6730, 0.6790.”