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AUDUSD is Showing Correctional Dynamics

11/14/2022 11:02 AM

The Australian dollar is showing mixed trading dynamics, reversing downwards after a solid "bullish" rally last week. Against the backdrop of the publication of data on inflation in the US on Thursday, November 10, the Australian dollar showed steady growth, updating local highs from September 20. In October, the Consumer Price Index slowed down more than expected from 8.2% to 7.7%, which strengthened investors' confidence in the reduction in the pace of interest rate increases by the US Federal Reserve. At the moment, the vast majority of analysts expect only a 50 basis point correction in December, while before the release of the data this probability was estimated at only 50%.

Investor activity is likely to remain subdued today, as practically none noteworthy macroeconomic publications are planned. Tomorrow, the minutes of the meeting of the Reserve Bank of Australia are expected to be released, as well as a block of statistics from China, where, among other things, October data on the dynamics of Industrial Production and Retail Sales will be published. Current forecasts suggest that production will slow down from 6.3% to 5.2% and sales will decline from 2.5% to 1.0%.

Bollinger Bands in D1 chart show active growth. The price range is expanding but it fails to conform to the surge of "bullish" sentiments at the moment. MACD grows, preserving a stable buy signal (located above the signal line). Stochastic resumed active growth at the end of last week, but at the moment it is again near its highs, indicating the risks of the Australian dollar being overbought in the ultra-short term.

Resistance levels: 0.6715, 0.6750, 0.6800, 0.6853. | Support levels: 0.6650, 0.6572, 0.6520, 0.6450.

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