- AUD/USD has cleared above the key 200-day moving average now acting as a near-term support of 0.6595.
- Consensus estimates are expecting a softer AU monthly CPI for October (5.2% vs. 5.6% Sep) for tomorrow, 29 November.
- Recent hawkish rhetoric from newly appointed RBA governor Bullock has narrowed the discount yield spread between the 2-year AU sovereign bond over the US Treasury note.
- Watch the key short-term support of 0.6570 on the AUD/USD.
The AUD/USD has staged the expected rally right above the 0.6330 key short-term support as highlighted in our analysis where it printed an intraday low of 0.6339 on 10 November 2023 and hit the 0.6520 resistance on 15 November 2023.
Thereafter, its price actions continued its short-term bullish momentum as it cleared above 0.6520 and the long-term 200-day moving average (acting as a resistance at 0.6595) yesterday, 27 November 2023.
The recent impulsive upmove in the AUD/USD in place since 26 October 2023 has been primarily driven by renewed hawkish rhetoric of the Australian central bank, RBA under the helm of a newly appointed governor Michele Bullock who has a more hawkish vibe than her predecessor.
RBA governor Bullock highlighted in her recent speech last week that Australia’s inflation has been driven by domestic factors rather than imported goods such as oil, hence it is likely a challenging task for RBA to bring such elevated domestic inflationary pressure down which in turn may require higher interest rates.
Narrowing of the discount spread between the 2-year AU sovereign bond over US Treasury note
