Later today, key US economic indicators will influence AUD/USD and affect US-Australian interest rate differentials.
Hotter-than-expected retail sales and consumer sentiment figures could signal a less dovish Fed rate path. Expectations of fewer Fed rate cuts may widen the rate differential in the US dollar’s favor, pushing AUD/USD toward the 200-day EMA. If breached, the bears could target the crucial $0.64500 support level.
Conversely, softer data may boost expectations of multiple Fed rate cuts, narrowing the rate differential. Under this scenario, AUD/USD could move above the 50-day EMA, bringing the $0.65500 resistance level into sight.
Beyond the data, FOMC members’ reactions to the data and recent inflation figures may also move the dial.
