Australian Dollar retreats from daily highs, rejected at 20-day SMA

• AUD/USD declined by 0.14% to 0.6495 in Monday's session.
• Selling pressure near the intraday high of 0.6550 drove the AUD/USD lower.
• Markets await key US and Australian inflation data later this week.

The AUD/USD declined by 0.14% to 0.6495 in Monday's session, driven by selling pressure near the intraday high of 0.6550. Despite the US Dollar's weakness, the Australian Dollar's performance suggests its own underlying weakness. There won't be any highlights in any of the Australian or American economic calendars.

The AUD/USD pair exhibits a mixed outlook, influenced by the interplay of a hawkish Reserve Bank of Australia (RBA) and mixed local economic data. The US Dollar's strength has weighed on AUD/USD, but the RBA's potential for future rate hikes may limit the downside.

Daily digest market movers: Australian Dollar retreats on quiet Monday, eyes on inflation data

• The AUD/USD pair retreats from its intraday high of 0.6550, losing most of its gains amid weak performance by both the Australian Dollar and the US Dollar.
• The US Dollar Index corrects to 106.80, pulling back from Friday's two-year high of 108.00.
• Investors will watch the US Personal Consumption Expenditure Price Index on Wednesday for clues on future Fed interest rate decisions.
• October's core PCE inflation is expected to rise to 2.8%, up from 2.7% in September.
• Australia's CPI data for October, due Wednesday, is expected to show an increase to 2.3% from 2.1% in September.
• The CPI outcome could shape expectations for the RBA interest rate path in the coming months.
• The RBA is projected to keep its Official Cash Rate steady at 4.35% through year-end.

AUD/USD Technical Outlook: Pair faces resistance at 0.6540 with indicators showing mixed signals

The AUD/USD pair fell sharply after failing to break above the 20-day Simple Moving Average (SMA) at 0.6540, suggesting that the bulls are unable to stage a recovery. The Relative Strength Index (RSI) is below 50, indicating that the bears are in control. However, the Moving Average Convergence Divergence (MACD) is green, indicating that there is still some bullish momentum. Overall, the technical outlook is mixed, with the bears having the upper hand in the short term. If the AUD/USD pair breaks below the 0.6400 support level, it could fall further toward the 0.6300 level. On the other hand, if the pair can break above the 0.6540 resistance level, it could rally toward the 0.6600 level.