AUD/USD stays firm awaiting RBA speech; US PCE ahead in the week

• AUD/USD stabilizes after gains, with traders eyeing the 200-DMA and upcoming Australian consumer sentiment indicators.
• Mixed messages from Fed officials on rate cuts contrast with potential optimism from RBA’s upcoming commentary.
• Geopolitical tensions and global economic indicators may sway risk appetite, influencing AUD/USD direction.

The Aussie Dollar (AUD) begins the Asian session virtually unchanged vs. the US Dollar after clocking solid gains of 0.41% on Monday. At the time of writing, the AUD/USD trades at 0.6539, beneath the 200-day moving average (DMA).

AUD/USD traders await Aussie’s Consumer Confidence

Wall Street ended Monday’s session with losses as traders braced for the release of a US inflation report. US New Home Sales in February contracted to pre-pandemic levels, decreasing -0.3% MoM from a 1.7% rise in January, from 0.664 million to 0.662 million. Other data showed that the Chicago Fed National Activity Index improved from -0.54 to 0.05.

Elsewhere, the Dallas Fed Manufacturing survey fell from -11.3 in February to -14.4 in March and below expectations for a minimal rise.

On the Aussie’s front, the schedule will feature the Consumer Confidence and the speech of Ellis Connolly, a Reserve Bank of Australia (RBA) member. In the US, traders are waiting for the release of the Fed’s preferred gauge for inflation, the Core Personal Consumption Expenditure (PCE), expected to dip from 0.4% to 0.3% MoM, which headline inflation is foreseen to tick up from 0.3% to 0.4% MoM.

Fed speakers remained split about rate cuts

Atlanta Fed President Raphael Bostic said he expects just one rate cut this year, adding that cutting rates too soon could be more disruptive. At the same time, his colleague, Chicago Fed President Austan Goolsbee, adheres to the majority of the board and expects three cuts, though he said he needs more evidence of inflation “coming down.”

Fed Governor Lisa Cook echoed Bostic's comments, saying that cutting too soon increases the risks of inflation becoming entrenched. She added that the Fed’s dual mandate goals are moving toward better balance.

Given the fundamental backdrop and a positive market mood, the AUD/USD can extend its gains and test key resistance levels. Nevertheless, the sudden escalation of the Russia-Ukraine conflict, alongside the Red Sea crisis, could dent investors' appetite for riskier assets, and seeking safety could underpin the Greenback.

AUD/USD Price Analysis: Technical outlook

The AUD/USD pair bounced off last Friday’s lows and is climbing but faces a key resistance level at 0.6551, the confluence of the 50 and 200-day moving averages (DMA). Once breached, further upside is seen. The next supply zone would be the 100-DMA at 0.6589, ahead of 0.6600. On the other hand, sellers' failure at 0.6550 would sponsor a leg-down, and the pair could re-test the 0.6500 figure.