Australian Dollar stands soft as investors await local CPI data

• The AUD/USD declined on Tuesday to 0.6460.
• Market participants await inflation data amid renewed US-China trade war fears.
• Mixed local data, hawkish RBA and US Dollar strength influence AUD/USD sentiment.

The AUD/USD pair has been struggling to sustain its intraday gains, extending its losses for the second consecutive day and currently trading around 0.6460. Market participants will be closely monitoring inflation data due for release during Wednesday’s trading hours, with geopolitical concerns, particularly renewed US-China trade war fears, casting a shadow over the currency.

The AUD/USD pair faces an uncertain outlook influenced by the hawkish Reserve Bank of Australia (RBA) and mixed Australian economic data. The US Dollar’s strength has weighed on the pair, but potential rate hikes from the RBA may limit the downside.

Daily digest market movers: Australian Dollar pressured lower ahead of inflation data

• President-elect Donald Trump’s threatened tariffs fuel risk aversion, weakening the China-sensitive Australian Dollar.
• Australia’s inflation rate is forecast to climb to 2.3% YoY in October, up from 2.1% in September.
• The RBA’s next rate announcement on December 10 may be influenced by the inflation report which could stop the Aussie’s bleeding.
• On the other hand, the US Personal Consumption Expenditure Price Index on Wednesday will provide clues for Fed interest rate decisions and might also move the pair.
• On Thursday, November’s Federal Open Market Committee Minutes showed little insight.
• Federal Reserve officials had mixed views on further rate cuts but agreed not to signal future policy direction clearly.

AUD/USD technical outlook: Indicators lack momentum, but support at 0.6430 may hinder further downside.

The AUD/USD continues to struggle for momentum with technical indicators signaling further weakness. Both the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) remain in negative territory, suggesting that bears are in control. However, the currency pair has found support at 0.6430, which could potentially halt the decline. On the upside, a break above 0.6450 could trigger a recovery.