In recent days, the battle between the US dollar (USD) and its Australian counterpart (AUD) has intensified, with the AUD making a notable comeback. 

Notably, the Australian dollar recovered some lost ground against the USD after the Federal Reserve skipped a rate hike at its September meeting. This, coupled with China’s economic improvements fueled by government stimulus, limited the potential downside for AUD.

At the time of publication on September 22, the USD/AUD pair was sitting at 1.55, after the greenback fell over 0.3% in the past 24 hours.

USD/AUD 1-day chart. Source: TradingView

Why is USD struggling against AUD?

The slight slip in USD/AUD comes as the Aussie successfully holds its ground, although it comes under some pressure after the Fed policymakers said they expected at least one more rate hike in 2023, after skipping one this month.

This means that interest rates in the US will remain in the 5.25-5.50% range for the time being. However, Fed Chairman Jerome Powell said the central bank will remain focused on achieving its 2% inflation goal, leaving the door open for further hikes, if necessary.

“The Committee is strongly committed to returning inflation to its 2% objective.”

– Fed policymakers noted in their statement.

In turn, the AUD could come under additional pressure against the greenback if the Fed turns hawkish once again in the coming months. 

Meanwhile, recent economic data in the US displayed mixed results, with the weekly initial jobless claims plummeting to 201,000, the lowest since January. 

USD/AUD technical analysis

Although the US dollar did not manage to make a significant breakout against the AUD, technical indicators appear to remain bullish on the greenback’s prospects.

READ MORE -  Bitcoin is ‘close to a party,’ predicts crypto trading expert

Notably, the summary of 1-day gauges on TradingView suggests the USD/AUD pair is a ‘Buy,’ based on 11 indicators recommending a ‘Buy,’ 6 indicating a ‘Sell,’ while 8 remain ‘Neutral.’

Technical analysis overview of USD/AUD. Source: TradingView

The moving averages (MAs) show a particularly upbeat sentiment, with 9 ‘Buy’ recommendations. On the other hand, just ‘4’ MAs show the pair is a ‘Sell’ and 1 stood as ‘Neutral.’

At the same time, another key technical indicator, oscillators, indicated a ‘Neutral’ consensus rating for the pair. 

Buy stocks now with Interactive Brokers – the most advanced investment platform

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

The post What’s going on with the US dollar vs. Australian dollar (USD/AUD)? appeared first on Finbold.

Avatar photo
Dennis is a business and financial writer, who had spent almost his entire life independently reporting on different business ventures with major impact on the US and global economy. Dennis places a special focus on examining tech stocks, biotech stocks all while investing a great part of his early hours to researching and writing on the companies in the US markets. Dennis has 15+ years of experience in financial markets.