The AUD/USD maintains its upward trajectory on Tuesday morning, approaching its peak level since October 2024. The asset was positioned at 0.6716, reflecting an increase of nearly 5% from its lowest point recorded in November of the previous year. The Australian dollar has demonstrated a robust upward trajectory in recent weeks, particularly as it has become evident that the Federal Reserve and the Reserve Bank of Australia will pursue divergent paths this year. The Federal Reserve implemented three rate reductions last year, and the likelihood of additional cuts occurring this year has increased. Minutes released last week indicated that a majority of Fed officials were in favor of additional cuts this year, contingent upon a continued decline in inflation.
The meeting took place prior to the release of the November inflation report by the US. Following the meeting, data indicated that the headline Consumer Price Index decreased to 2.6% in November. Australia’s inflation has consistently stayed at a high level. The upcoming numbers on Wednesday are anticipated to indicate that the headline CPI has shifted to 3.7% in November, down from the prior 3.8%. The Trimmed Mean CPI is anticipated to register at 3.1%, down from the prior 3.3%, whereas the Weighted CPI is projected to be 3.2%. Australia’s inflation continues to exceed the 2% target, leading the RBA to suggest potential rate hikes in upcoming meetings.
The AUD/USD pair has shown strong performance in recent months, attributed to the high levels of commodity prices. Key commodities produced by Australia, such as iron ore and gold, have experienced significant increases in recent months. The Australian dollar frequently serves as an indicator for the commodity market. The forthcoming pivotal driver for the AUD/USD pair will be the impending US employment figures, set to be released starting Wednesday this week. The daily chart indicates that the AUD/USD pair has experienced a robust uptrend over the past few weeks. The movement observed was from a low of 0.6421 in November to the present value of 0.6715.
The pair has surpassed the significant resistance level at 0.6705, marking its peak on September 17. The asset continues to trade above both the 50-day and 100-day moving averages. The pair has established a cup-and-handle pattern, which is a typical indicator of bullish continuation. Consequently, the pair is expected to maintain its upward trajectory as bullish sentiment aims for the key psychological level at 0.6800.