Ella 
AUD/USD managed to hold on to the 100-day simple moving average (SMA) support on Wednesday and attracted some buying near 0.6645. Spot prices maintained a buying tone around the 0.6660-0.6665 area during early European trading and now appear to have ended a three-day losing streak, hitting more than three-week lows on Tuesday.
The U.S. dollar (USD) has struggled to capitalize on its gains over the past three days and retreated from near its monthly peak amid dovish expectations from the Federal Reserve (Fed). In addition, the positive tone in European stock markets also weakened the safe-haven US dollar in favor of the risk-sensitive Australian dollar (AUD). This became a key factor in AUD/USD finding some support, despite the lack of bullish conviction on the intraday rise.
Investors prefer to wait for the release of the latest US consumer inflation data for clues on the path of the Federal Reserve’s interest rate cuts, which will play a key role in influencing US dollar price dynamics and provide new directional momentum for AUD/USD. Any further signs of cooling inflation would boost bets on a 50 basis point rate cut by the Federal Reserve in September and deal a heavy blow to the dollar. Meanwhile, the reaction to stronger U.S. consumer prices is likely to be limited, suggesting a weaker dollar.
Amid the hawkish stance of the Reserve Bank of Australia (RBA), the above fundamental backdrop supports the prospect of further AUD/USD appreciation in the near term. Still, it would be prudent to wait for strong follow-through buying before confirming that the recent corrective pullback from August’s multi-month high around 0.6825 is over and placing aggressive bullish bets on the pair.
