AUD/USD ended Tuesday little changed, rebounding from an intraday low of 0.7204 but stalling around 0.7220 as firmer oil prices supported the US dollar and left the pair at 0.7219. Geopolitical tensions involving attacks on US Navy vessels and Iranian oil vessels kept attention on the Federal Reserve, with rate-hike pricing steady. Prime Terminal put the probability of a 0.25% increase at the 15-16 September meeting at 63%, while markets also looked ahead to US CPI and PPI as the next catalysts.
Mixed US Economic Data and Inflation Expectations
US data were mixed. The NY Fed Survey of Consumer Expectations showed households expecting three- and five-year inflation to ease in August. The NFIB Small Business Optimism Index slipped to 98.7, though it stayed above the 98.0 long-run average; one third of firms expected to raise prices and 28% projected increases. For August CPI, forecasts point to 0.4% MoM and 3.4% YoY, with core CPI seen at 0.2% MoM and 2.4% YoY.
Technical Analysis of AUD/USD
Technically, AUD/USD held above the 50-, 100- and 200-day SMAs clustered near 0.7051, with RSI near 68; support levels were cited at 0.7198 and 0.7050.
