The Australian Dollar (AUD) underperformed its major currency peers on Wednesday, trading 0.17% lower at around 0.7070 against the US Dollar (USD) during the European trading session [1]. Despite this weakness, the AUD/USD pair maintained a constructive near-term bullish bias, holding above the 20-period exponential moving average (EMA) at 0.7045, which suggests buyers retain control on dips [1]. The Relative Strength Index (14) stood at 57.6, indicating positive momentum without being overbought [1].
Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser commented that "inflation is too high, and the central bank needs to raise interest rates to bring price pressures down," keeping the door open for further monetary policy tightening [1]. Hauser emphasized that monetary policy needs to bring inflation down and reduce demand in the economy [1].
Meanwhile, the US Dollar also traded lower as market fears of a Federal Reserve (Fed) interest rate hike in the September meeting have receded due to weak US data for July [1]. Investors are awaiting the release of the Federal Open Market Committee (FOMC) minutes from the July policy meeting, scheduled for 18:00 GMT, as well as Australian employment data for July, which will be released on Thursday [1].
Technical analysis points to immediate support for AUD/USD at the 20-day EMA (0.7045), with the August 17 high at 0.7129 serving as the next key resistance level [1].
CONCLUSION
Despite the Australian Dollar's underperformance and ongoing selling pressure, technical indicators suggest a constructive near-term outlook for AUD/USD as it holds above key support. Market participants are closely watching upcoming FOMC minutes and Australian employment data for further direction.