AUD rally stalls ahead of key US PCE inflation report

The Australian dollar’s rally has met its match around a key resistance area, which includes the January trendline and Q3 open price. A 2-bar reversal formed on Wednesday, following RSI reaching overbought the day prior. And as the US dollar has weakened on bets on Fed cuts ahead of a key PCE inflation report, I suspect there may be some disappointment and the potential for a USD dollar bounce.

This is why we’re looking for some mean reversion and towards the 0.6570 at a minimum (near its 200-day EMA) or support around 65c.

Bears could seek to fade into low volatility retracements within Wednesday’s range, while prices remain beneath Wednesday’s high.

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