AUD/USD Price Forecast: Climbs to 0.6685 area amid modest USD weakness, ahead of US data

• AUD/USD rebounds around 50 pips from a nearly two-month low touched this Wednesday.
• The technical setup warrants caution before confirming a near-term bottom for the major.
• Traders now look forward to important US macro releases to grab short-term opportunities.

The AUD/USD pair stages a goodish intraday recovery from its lowest level since August 8, around the 0.6535 region touched earlier this Wednesday and for now, seems to have snapped a three-day losing streak. Spot prices climb to a fresh daily high, around the 0.6685 area during the first half of the European session a modest US Dollar (USD) slide, though any meaningful appreciating move still seems elusive. 

The USD Index (DXY), which tracks the Greenback against a basket of currencies, extends the overnight pullback from a three-month peak amid a further decline in the US Treasury bond yields. Meanwhile, the latest Australian consumer inflation figures released today dashed hopes for an interest rate cut by the Reserve Bank of Australia (RBA) before the year-end. This, in turn, underpins the Australian Dollar (AUD) and contributes to the AUD/USD pair's intraday bounce.

That said, firming expectations for a less aggressive policy easing by the Federal Reserve (Fed), along with a generally weaker tone around the equity markets, should act as a tailwind for the safe-haven buck and cap the risk-sensitive Aussie. Traders might also refrain from placing aggressive directional bets ahead of important US macro releases. This makes it prudent to wait for strong follow-through buying before confirming that the AUD/USD pair has formed a near-term bottom.

From a technical perspective, the recent breakdown below the very important 200-day Simple Moving Average (SMA) was seen as a fresh trigger for bearish traders. Moreover, oscillators on the daily chart are holding deep in negative territory and are still away from being in the oversold zone. This, in turn, suggests that any subsequent recovery beyond the 0.6600 mark might still be seen as a selling opportunity and remain capped near the 0.6630 area, or the 200-day SMA breakpoint. 

The latter should act as a key pivotal point, which if cleared decisively could trigger a fresh bout of a short-covering rally and lift the AUD/USD pair to the 0.6675 intermediate hurdle en route to the 0.6700 round figure.

On the flip side, the daily swing low, around the 0.6535 area could offer some support ahead of the 0.6500 psychological mark. Some follow-through selling should pave the way for a further depreciating move towards the 0.6440-0.6435 support zone. The AUD/USD pair could eventually drop to the 0.6400 round figure and the next relevant support near the 0.6370 region.

AUD/USD daily chart