Struggles to sustain above 0.6400

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• AUD/USD faces selling pressure above 0.6400 as IMF warned decline in global output due to Middle East tensions.
• The USD Index drifted lower swiftly to near 106.00 as Fed policymakers supported keeping interest rates steady.
• AUD/USD trades in a Rising channel in which each pullback is considered as a buying opportunity.

The AUD/USD pair remained offered above the round-level resistance of 0.6400 in the early New York session. The Aussie asset struggles to extend recovery as the International Monetary Fund (IMF) warned that rising oil prices due to deepening Middle East tensions could dampen global Gross Domestic Product (GDP) and rebound inflation.

The expectations of one more interest rate increase from the Reserve Bank of Australia (RBA) have increased due to rising inflation expectations, supported by higher oil prices.

Meanwhile, the US Dollar Index (DXY) drifted lower swiftly to near 106.00 as Federal Reserve (Fed) policymakers supported keeping interest rates steady at 5.25-5.50% in the November monetary policy meeting.

Going forward, investors will focus on the US inflation data, which will be published on Thursday. The monthly headline and core inflation are seen growing by 0.3% in September.

AUD/USD trades in a Rising channel chart pattern on an hourly scale in which each pullback is considered as a buying opportunity by the market participants. The 50-period Exponential Moving Average (EMA) at 0.6388 is considered as a buying opportunity by the market participants.

The Relative Strength Index (RSI) (14) skids into the 40.00-60.00 range, which indicates a consolidation ahead.

A fresh downside would appear if the Aussie asset dropped below October 03 low around 0.6286. This would expose the asset to 21 October 2022 low at 0.6212, followed by 13 October 2022 low at 0.6170.

In an alternate scenario, a decisive break above August 15 high around 0.6522 will drive the asset to August 9 high at 0.6571. Breach of the latter will drive the asset towards August 10 high at 0.6616.

AUD/USD four-hour chart