On Tuesday, the Australian dollar fell against the US dollar for the third consecutive trading day as the US dollar continued to strengthen following the US election. Market bearish sentiment towards the Australian dollar significantly increased. Following the confirmation of Trump's victory in the US election, the market anticipates that his fiscal policies may lead to inflationary pressure, possibly prompting the Federal Reserve to tighten monetary policy, thereby further boosting the US dollar. Trump's proposal to increase tariffs on goods from certain Asian countries indirectly pressures Australia, an exporter closely tied to Asian markets, further exacerbating the downward trend of the Australian dollar against the US dollar.
From a technical perspective, the daily chart of the Australian dollar against the US dollar shows short-term downward pressure. The exchange rate remains below the 9-day moving average, and the 14-day Relative Strength Index (RSI) stays below 50, reinforcing a bearish outlook. If it falls below the November 6th low of 0.6512, the Australian dollar against the US dollar may test the psychological support level of 0.6500.
On the other hand, the latest data from Westpac in Australia shows that the consumer confidence index in November rose to 94.6, the highest level in two and a half years. Consumers' confidence in their household finances and economic outlook has improved. However, the confidence index remains below 100, reflecting an overall cautious sentiment in the market.
On the upside, the short-term resistance for the Australian dollar against the US dollar is located near the 9-day moving average at 0.6591. If it breaks through this resistance, it may rise further to a three-week high of 0.6687, or even test the psychological barrier of 0.6700. The US October CPI data, due on Wednesday, will be the focal point for the market. If the data is higher than expected, it may further support the US dollar, increasing the downward pressure on the Australian dollar against the US dollar.
