AUD/USD Daily Outlook Update AUD/USD retreats modestly from a new one-month high registered earlier today as the pair failed to break past the 100-day SMA crucial resistance level. Yet, the spot prices stay above the psychologically important 0.7000 level amid the early European session as investors appear reluctant to make any decisive moves prior to this week’s central bank event and data events. The Australian inflation figures are set to be published on Wednesday, after which the results of the two-day FOMC meeting will follow. In addition to that, the US Advance Q3 GDP and US PCE Price Index will be in focus on Thursday. This week’s data and events will reveal whether or not there is a need for any further Fed policy changes, and the implications of which will have an effect on USD and AUD/USD. For now, wagers on another rate hike from the US central bank by year-end due to concerns about inflation risks caused by volatile oil prices, coupled with geopolitical uncertainties, may continue to provide support to the haven dollar. At the same time, the risk for the AUD/USD currency pair is shielded due to the hawkish outlook on the Reserve Bank of Australia (RBA), suggesting the need for caution before assuming that the current prices have topped out. On the technical side, the AUD/USD continues trading under the cap imposed by the 100-day SMA at 0.7033 levels, yet the pair finds support above the 38.2% Fibonacci retracement of the recent downtrend. In addition, the Moving Average Convergence Divergence (MACD) indicator has returned to positive territory, while the Relative Strength Index (RSI) at 52.9 is just slightly below the middle of the scale. Momentum oscillators thus signal a fragile rebound, which is capped by the price resistance. In addition to this, a breakout of the 100-day SMA of 0.7033 will bring a 50.0% retracement at 0.7064 into the picture, followed by a 61.8% retracement at 0.7105 and a 78.6% retracement at 0.7162, before the total recovery area at 0.7236 comes up. Conversely, on the lower side, initial support is likely to come from the 38.2% retracement at 0.7024, followed by the 23.6% retracement at 0.6974 and the previous cycle low around 0.6893.
