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AUD/USD in Focus: Resistance Levels and Inflation Data Awaited

AUD/USD resistance

The Aussie dollar faces resistance amid anticipation of inflation data and US economic indicators, impacting the AUD/USD outlook.

The Australian dollar (AUD) saw a subdued start to the week against the US dollar (USD) as it struggled to break above key resistance levels amidst anticipation surrounding upcoming inflation data. Asian indices also experienced a mild decline at the onset of the European session, with attention directed towards further potential economic measures from China.

Asian Indices Ease Amidst Economic Speculation

The MSCI Asia Pacific Index recorded a slight dip as the week commenced, following a mixed performance in US markets at the end of last week. Despite this, US stocks had an overall positive trajectory, with the S&P 500 reaching a new all-time high. Similarly, the Nikkei 225 mirrored this upward trend.

Chinese indices, however, faced downward pressure after a recent bullish streak, driven partly by significant stock and ETF purchases by state-linked investment entities. Investors closely monitor China’s economic policies amidst ongoing challenges in credit growth, domestic consumption, disinflation, and the real estate sector. Recent adjustments, including a decrease in the 5-year loan prime rate, indicate efforts to stimulate economic activity.

AUD/USD in Focus: Resistance Levels and Inflation Data Awaited

AUD/USD Faces Resistance

The AUD/USD pair started the week on a lower note after encountering resistance around the 0.6580 level. Despite attempts to breach this level last week, the pair retreated towards the end of the trading session. The 0.6580 mark has been pivotal, often delineating bullish and bearish movements.

Furthermore, the pair has moved away from the 200-day simple moving average, with potential support levels at 0.6520 and 0.6460. Eyes are now on the forthcoming Australian inflation data, scheduled for early Wednesday, with forecasts suggesting a slight uptick from 3.4% to 3.5% in January. This follows a series of interest rate hikes by the Reserve Bank of Australia in response to mounting price pressures.

US Economic Data in Focus

In addition to Australian inflation figures, market participants await the US Personal Consumption Expenditures (PCE) data, a key indicator of inflationary trends. The second estimate of US GDP for Q4 is also on the radar, although its impact may be less significant than the initial figures, barring any substantial revisions.

Meanwhile, AUD/JPY has encountered resistance following recent daily candle formations, signaling a potential downturn in bullish momentum. Despite this, the uptrend remains intact, with the pair trading above the 50 and 200-day simple moving averages, while resistance at 98.70 remains a key level to watch.

As markets navigate through economic data releases and geopolitical developments, the outlook for the Aussie dollar against its major counterparts remains subject to evolving market dynamics and policy responses.

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