AUD/USD Approaches November Low with Australia GDP on Tap

Australian Dollar Outlook: AUD/USD

AUD/USD approaches the November low (0.6434) as it gives back a three-day rally, but Australia’s Gross Domestic Product (GDP) report may curb the recent decline in the exchange rate as the update is anticipated to show an uptick in economic activity.

AUD/USD Approaches November Low with Australia GDP on Tap

The depreciation in AUD/USD following the US election may persist as the Federal Reserve warns that ‘it would likely be appropriate to move gradually toward a more neutral stance of policy over time,’ and it remains to be seen if Chairman Jerome Powell and Co. will deliver another rate-cut at its last meeting for 2024 as the US Personal Consumption Expenditure (PCE) Price Index showed an uptick in both the headline and core rate of inflation.

Join David Song for the Weekly Fundamental Market Outlook webinar.

David provides a market overview and takes questions in real-time. Register Here

Meanwhile, the Reserve Bank of Australia (RBA) appears to be on track to keep the cash rate on hold over the remainder of the year as ‘members agreed that it was important to keep monetary policy sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target.’

Australia Economic Calendar

In turn, the RBA may continue to tame speculation for lower interest rates as the GDP report is anticipated to show the economy growing 0.4% in the third quarter after expanding 0.2% during the previous period, and a positive development may generate a bullish reaction in the Australia Dollar as it raises the central bank’s scope to further combat inflation.

With that said, AUD/USD may continue to hold within the yearly range should it defend the November low (0.6434), but the exchange rate may attempt to test the August low (0.6349) should the weakness following the US election persist.

AUD/USD Price Chart – Daily

Chart Prepared by David Song, Strategist; AUD/USD on TradingView

AUD/USD snaps the recent series of higher highs and lows after struggling to close back above the 0.6510 (38.2% Fibonacci retracement) to 0.6520 (23.6% Fibonacci retracement) region, with a break/close below the 0.6380 (78.6% Fibonacci retracement) to 0.6410 (50% Fibonacci extension) zone bringing the yearly low (0.6349) on the radar.
Next area of interest comes in around the 2023 low (0.6270) but AUD/USD may hold within the yearly range if it defends the 0.6380 (78.6% Fibonacci retracement) to 0.6410 (50% Fibonacci extension) zone.
Need a close the 0.6510 (38.2% Fibonacci retracement) to 0.6520 (23.6% Fibonacci retracement) region to open up the 0.6590 (38.2% Fibonacci extension) to 0.6600 (23.6% Fibonacci retracement) zone, with the next area of interest coming in around the November high (0.6688).

Additional Market Outlooks

US Dollar Forecast: USD/JPY Gives Back Post-US Election Rally

US Dollar Forecast: GBP/USD Still Vulnerable to Test of May Low

NZD/USD Rebounds Ahead of 2023 Low with RBNZ Expected to Cut

Gold Price Stages Five-Day Rally for First Time Since March

--- Written by David Song, Senior Strategist

Follow on X at @DavidJSong

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.