The AUD/USD exchange rate experienced an upward trend over three consecutive days, driven by a weakening US dollar amidst worries regarding the Federal Reserve’s autonomy. The asset reached a peak of 0.6720, surpassing the previous week’s low of 0.6663. The Australian dollar experienced a rebound as investors continued to express concerns regarding the Federal Reserve’s independence in light of a statement made by Jerome Powell. Powell indicated that the Department of Justice has issued subpoenas concerning the upgrade of its headquarters. Powell and the majority of analysts contend that the lawsuit stems from Trump’s aspiration for significantly reduced interest rates. Although Powell’s term concludes in May, he is entitled to continue his position at the Fed until 2028. By removing him, Trump would have the opportunity to nominate another supportive Fed official.
The AUD/USD pair experienced an increase following the robust Australian household spending data, indicating positive economic performance. As reported by the statistics agency, spending experienced an increase of 6.3% year-over-year and 1.0% month-over-month in November of the previous year. Household spending holds significant weight as consumer expenditure constitutes a major component of the Australian economy. As we look forward, the upcoming significant driver for the AUD/USD exchange rate will be the release of the US consumer price index data, scheduled for later today.
Economists anticipate that the upcoming data will indicate the headline Consumer Price Index held steady at 2.7%, while the core CPI is projected to decline from 2.7% to 2.6% in December. Inflation is expected to trend downward in the upcoming months, given that gasoline prices and mortgage rates have reached their lowest levels in years. Mortgage rates experienced a decline following Trump’s request for his administration officials to purchase mortgage bonds totaling $200 billion.
The 12-hour chart timeframe indicates that the AUD/USD exchange rate has remained stable over the past few days. The asset has surpassed the significant resistance level at 0.6700, marking the peak swing on September 17. The pair has established an ascending channel alongside a cup-and-handle pattern, which is typically regarded as a bullish continuation indicator. It continues to trade above the 50-day and 100-day Exponential Moving Averages. Consequently, the most probable projection indicates a continued ascent as bullish sentiment aims for the next significant resistance level at 0.6765, which was reached on January 7. The optimistic perspective will be negated if it falls beneath the lower boundary of the ascending channel.