AUD/USD Price Analysis – Jan 16, 2025
Daily Price Outlook
During the European trading session, the AUD/USD currency pair struggled to keep up its winning streak, dipping to around the 0.6215 level and even touching an intra-day low of 0.6196.
This decline came after Australia’s employment report showed a rise in the seasonally adjusted unemployment rate to 4.0% in December, up from 3.9% in November.
The data, released by the Australian Bureau of Statistics (ABS), met market expectations but signaled a slight cooling in the labor market, which weighed on the Aussie Dollar.
Meanwhile, the US Dollar remained under pressure, with the US Dollar Index (DXY) trading near 109.00. The Greenback extended its losses as US inflation data for December came in cooler than expected, fueling speculation that the Federal Reserve might cut interest rates twice this year. These factors combined to keep AUD/USD under selling pressure during the session.
Mixed Employment Data and Weak Consumer Confidence Weigh on AUD/USD
On the data front, Australia’s unemployment rate rose slightly to 4.0% in December, up from 3.9% in November, as reported by the Australian Bureau of Statistics (ABS).
However, employment saw a strong increase, adding 56,300 jobs in December, much higher than the expected 15,000. This marked a significant improvement from November’s revised figure of 28,200.
The mixed data showed that while more people found jobs, unemployment also rose due to a larger number of people actively seeking work.
Bjorn Jarvis, head of labor statistics at the ABS, highlighted some important trends. The employment-to-population ratio reached a record high of 64.5%, which is 0.5% higher than a year ago and 2.3% above pre-COVID-19 levels.
He noted that the rise in both employment and unemployment pushed the participation rate higher, indicating more Australians are either working or looking for jobs. This suggests a robust but evolving labor market.
Meanwhile, consumer sentiment remained weak, with the Westpac Consumer Confidence Index dropping by 0.7% to 92.1 points, reflecting ongoing pessimism about the economy.
The dip in confidence has raised concerns about interest rate decisions, with markets now expecting the Reserve Bank of Australia to lower its cash rate from 4.35% by 25 basis points in February and potentially a full rate cut by April.
The mixed Australian employment data and weak consumer confidence weighed on the AUD/USD pair, as rising unemployment and pessimism about the economy raised concerns over rate cuts by the Reserve Bank of Australia, pushing the Aussie Dollar lower against the US Dollar.
Weaker US Inflation Data Fuels Expectations of Rate Cuts, Impacting AUD/USD Pair
On the US front, the US Dollar Index (DXY), which tracks the Greenback against six major currencies, is trading near 109.00. The US Dollar has been weakening due to lower-than-expected US inflation data for December.
The Consumer Price Index (CPI) rose by 2.9% year-over-year, up from 2.7% in November. On a monthly basis, CPI increased by 0.4%, slightly higher than the 0.3% in November.
This cooling inflation has led to expectations that the Federal Reserve might cut interest rates twice this year.
The US Core CPI, excluding food and energy prices, increased by 3.2% annually, which was below November’s figure and analysts’ expectations of 3.3%.
On a monthly basis, core CPI grew by 0.2%. The Producer Price Index (PPI) also showed slower growth, rising by just 0.2% month-over-month in December, below the 0.3% forecast, signaling easing inflationary pressures.
Meanwhile, Scott Bessent, a Treasury Secretary nominee, stressed the importance of keeping the US Dollar as the world’s reserve currency to ensure economic stability.
According to the Federal Reserve’s Beige Book survey, economic activity grew moderately in late 2023, with strong consumer spending during the holiday season.
However, manufacturing slowed slightly due to inventory build-up, and policymakers, including Michelle Bowman, are managing expectations of slower interest rate cuts.
Therefore, the weaker-than-expected US inflation data and cooling economic pressures suggest the Federal Reserve may cut interest rates, which likely weakened the US Dollar. As a result, the AUD/USD pair could see upward movement, benefiting the Australian Dollar.
AUD/USD – Technical Analysis
The AUD/USD pair is trading at $0.62007, down 0.41% on the day, reflecting persistent bearish pressure in the market. The pair hovers just below the pivot point at $0.62071, a critical threshold for determining short-term sentiment.
Immediate resistance is seen at $0.62455, with higher targets at $0.62898 and $0.63274. On the downside, immediate support lies at $0.61781, followed by $0.61488 and deeper support at $0.61208.
The 50-day EMA at $0.62045 aligns closely with the pivot point, reinforcing the significance of the $0.62071 level. The downward trend is evident as the price remains below the 50 EMA, signaling that sellers dominate the market.
Short-term momentum indicates a potential move toward the $0.61488 support level if the pair fails to reclaim $0.62071.
Traders should monitor the $0.62071 pivot closely. A sustained break below this level would likely accelerate selling pressure, targeting $0.61781 initially, with an extended decline toward $0.61488.
Conversely, a move above $0.62455 could signal a reversal and test higher resistance levels, though the broader outlook remains bearish.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Critical Pivot Point: AUD/USD trades below $0.62071, signaling bearish momentum.
- Resistance Levels: Immediate resistance lies at $0.62455, followed by $0.62898 and $0.63274.
- EMA Alignment: The 50-day EMA at $0.62045 reinforces bearish sentiment below the pivot point.
The AUD/USD pair is trading at $0.62007, down 0.41% on the day, reflecting persistent bearish pressure in the market. The pair hovers just below the pivot point at $0.62071, a critical threshold for determining short-term sentiment.
Immediate resistance is seen at $0.62455, with higher targets at $0.62898 and $0.63274. On the downside, immediate support lies at $0.61781, followed by $0.61488 and deeper support at $0.61208.
The 50-day EMA at $0.62045 aligns closely with the pivot point, reinforcing the significance of the $0.62071 level. The downward trend is evident as the price remains below the 50 EMA, signaling that sellers dominate the market.
Short-term momentum indicates a potential move toward the $0.61488 support level if the pair fails to reclaim $0.62071.
Traders should monitor the $0.62071 pivot closely. A sustained break below this level would likely accelerate selling pressure, targeting $0.61781 initially, with an extended decline toward $0.61488.
Conversely, a move above $0.62455 could signal a reversal and test higher resistance levels, though the broader outlook remains bearish.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.62081
Take Profit – 0.61480
Stop Loss – 0.62409
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$601/ -$328
Profit & Loss Per Mini Lot = +$60/ -$32
AUD/USD Price Analysis – Jan 14, 2025
Daily Price Outlook
During the European trading session, the AUD/USD currency pair has rebounded strongly extending gains for the second consecutive day and recovering from 0.6131, its lowest level since April 2020.
This resurgence is fueled by robust commodity prices and improved global market sentiment, which supported risk-sensitive assets like the AUD.
However, economic challenges persist in Australia. The Westpac Consumer Confidence Index fell for the second month in a row, dropping 0.7% in January to 92.1 points, signaling consumer pessimism.
Meanwhile, markets are factoring in a 75% probability of a rate cut by the Reserve Bank of Australia (RBA) in February, keeping the AUD/USD pair under pressure.
Traders are eyeing the upcoming Australian employment data, which could provide further insights into the RBA’s policy trajectory.
US Dollar Strength and Its Impact on the Pair
On the US front, the broad-based US Dollar continues to exert pressure on the AUD/USD pair, supported by strong economic data and a hawkish outlook from the Federal Reserve.
The US Dollar Index (DXY) remains near 109.60, its highest level since November 2022, reflecting sustained demand for the greenback.
On the data front, the December’s Nonfarm Payrolls (NFP) data exceeded expectations, showing a robust 256,000 job additions, compared to forecasts of 160,000.
This robust labor market data has pushed US Treasury yields higher, with the 2-year yield at 4.42% and the 10-year yield at 4.80%.
Federal Reserve policymakers, including Kansas Fed President Jeffrey Schmid, have emphasized the need for a measured approach to rate cuts in 2025, reinforcing the USD’s strength.
Additionally, the upcoming US Producer Price Index (PPI) report is expected to provide further clarity on inflation trends, which could influence the Fed’s rate decisions and the trajectory of the AUD/USD pair.
China's Economic Stimulus and Its Ripple Effect on AUD/USD Amid Australia's Domestic Challenges
On the other hand, China’s economic developments remain a critical factor influencing the AUD, given Australia’s close trade ties with its largest trading partner.
The People’s Bank of China (PBOC) recently announced measures to support the Chinese Yuan, including raising the macro-prudential adjustment parameter for cross-border financing.
These measures are intended to maintain ample liquidity and stabilize China’s financial markets, indirectly benefiting the AUD through strengthened demand for Australian exports.
PBOC Governor Pan Gongsheng reaffirmed China’s commitment to bolstering the global economy, highlighting plans to utilize fiscal and monetary tools to sustain growth.
This optimism has provided additional support for the AUD/USD pair, as improved Chinese economic conditions typically lead to increased demand for Australian commodities.
Domestically, Australia’s TD-MI Inflation Gauge surged by 0.6% month-over-month in December, the largest monthly increase since 2023, complicating the RBA’s policy outlook.
Despite these challenges, China’s stimulus measures offer some relief for the AUD, underscoring the intertwined economic relationship between the two nations.
AUD/USD – Technical Analysis
The AUD/USD pair is trading at $0.61918, up 0.26%, as the Australian Dollar shows slight recovery amid a stabilizing U.S. Dollar. The price remains below the pivot point at $0.62071, maintaining a bearish tone despite the recent uptick.
Immediate resistance is located at $0.62615, with higher levels at $0.62898 and $0.63274. On the downside, support stands at $0.61781, with deeper thresholds at $0.61488 and $0.61208.
The 50-day EMA at $0.62069 aligns closely with the pivot point, reinforcing its significance as a key decision level. A break above $0.62071 may shift sentiment toward bullishness, potentially targeting the immediate resistance zone.
Conversely, failure to hold above this pivot point could trigger renewed selling pressure, targeting the $0.61480 region.
The Relative Strength Index (RSI) suggests neutral momentum, indicating that the market could go either way depending on the break of key levels.
While the near-term outlook leans bearish, a decisive break above $0.62071 would challenge the prevailing sentiment.
Traders should monitor U.S. economic data and commodity trends, as these remain critical drivers for the Australian Dollar’s trajectory.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bearish Bias Below $0.62071: AUD/USD faces selling pressure unless it breaks above this pivot.
- Resistance Levels: Immediate resistance lies at $0.62615, with further hurdles at $0.62898 and $0.63274.
- Support Levels: Key support is at $0.61781, with deeper levels at $0.61488 and $0.61208 offering critical downside protection.
The AUD/USD pair is trading at $0.61918, up 0.26%, as the Australian Dollar shows slight recovery amid a stabilizing U.S. Dollar. The price remains below the pivot point at $0.62071, maintaining a bearish tone despite the recent uptick.
Immediate resistance is located at $0.62615, with higher levels at $0.62898 and $0.63274. On the downside, support stands at $0.61781, with deeper thresholds at $0.61488 and $0.61208.
The 50-day EMA at $0.62069 aligns closely with the pivot point, reinforcing its significance as a key decision level. A break above $0.62071 may shift sentiment toward bullishness, potentially targeting the immediate resistance zone.
Conversely, failure to hold above this pivot point could trigger renewed selling pressure, targeting the $0.61480 region.
The Relative Strength Index (RSI) suggests neutral momentum, indicating that the market could go either way depending on the break of key levels.
While the near-term outlook leans bearish, a decisive break above $0.62071 would challenge the prevailing sentiment.
Traders should monitor U.S. economic data and commodity trends, as these remain critical drivers for the Australian Dollar’s trajectory.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.62071
Take Profit – 0.61480
Stop Loss – 0.62409
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$591/ -$338
Profit & Loss Per Mini Lot = +$59/ -$33
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD struggles below the $0.62190 pivot, testing $0.61781 support.
- 50 EMA at $0.62228 reinforces resistance, keeping the trend bearish.
- RSI indicates weak momentum; further declines likely if $0.62190 breaks.
AUD/USD is trading at $0.61964, down 0.28%, as bearish sentiment dominates amid global risk-off conditions. The pair is struggling to maintain ground above its pivot point at $0.62190, signaling potential downside risks.
The 50 EMA at $0.62228 has turned into a near-term resistance level, further weighing on the currency pair. The RSI is hovering in bearish territory, reflecting subdued momentum.
Immediate resistance is located at $0.62730, followed by $0.63058 and $0.63393, marking levels to watch for any bullish recovery.
On the downside, immediate support lies at $0.61781, with stronger support at $0.61488 and $0.61208. A sustained move below the pivot point could trigger further selling pressure, targeting the $0.61781 level initially, followed by $0.61530.
Traders considering short positions might look to enter below $0.62172, targeting $0.61530 with a stop-loss at $0.62523.
While the pair remains bearish in the short term, a break above $0.62190 and the 50 EMA could signal a reversal, paving the way for a test of $0.62730.
However, the broader trend remains cautious as the pair reacts to key technical and macroeconomic drivers.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.62172
Take Profit – 0.61530
Stop Loss – 0.62523
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$642/ -$351
Profit & Loss Per Mini Lot = +$64/ -$35
AUD/USD Price Analysis – Jan 09, 2025
Daily Price Outlook
During the European trading session, the AUD/USD currency pair continued its losing streak, staying under pressure around the 0.6193 level.
The main reason for its downward rally can be traced to disappointing domestic economic data and concerns about China’s economic outlook.
China's Consumer Price Index (CPI) data, released on Thursday, showed that inflation is facing deflationary risks. In December, the annual inflation only rose by 0.1%, slightly lower than November's 0.2% increase, which aligned with market expectations.
Besides this, traders are awaiting Friday’s US Nonfarm Payroll (NFP) report, as it may provide further direction for US Federal Reserve policy.
The US Dollar (USD) has been supported by hawkish signals from the Federal Open Market Committee (FOMC) meeting minutes and growing concerns over potential tariff plans under the incoming Trump administration.
US Dollar Strengthens Amid Strong Economic Data, While Australian Dollar Faces Pressure from Soft Inflation
On the US front, the broad-based US dollar has been holding strong, with the US Dollar Index (DXY) staying near the 109.00 level.
The Greenback is benefiting from hawkish signals in the Federal Reserve's (Fed) meeting minutes, as well as concerns over tariff plans from the incoming Trump administration. This strength in the dollar is also supported by rising US Treasury bond yields.
Moreover, the US labor market data provided positive signals. Initial Jobless Claims fell to 201,000, better than the expected 218,000. Meanwhile, the ADP Employment report showed a gain of 122K jobs in December, although this was below market expectations of 140K.
The ISM Services PMI also showed strong growth, rising to 54.1 from 52.1, beating the 53.3 forecast. The Prices Paid Index, a key inflation measure, also increased, indicating that inflationary pressures remain present.
Therefore, the strong US Dollar, supported by positive economic data and rising bond yields, puts pressure on the AUD/USD pair, likely causing the Australian Dollar to weaken further against the Greenback.
In contrast, the Australian Dollar (AUD) is facing challenges due to softer inflation data. Australia's core inflation, measured by the trimmed mean, fell to 3.2% annually from 3.5%, bringing it closer to the Reserve Bank of Australia's (RBA) target range of 2-3%. This has led traders to expect a potential interest rate cut from the RBA.
Australia's CPI rose 2.3% year-over-year in November, slightly above expectations, but it remains within the RBA’s target range. Despite this, there is a growing expectation of a rate cut in the coming months.
Hence, the softer inflation data and expectations of an interest rate cut by the RBA are likely to weigh on the Australian Dollar, potentially leading to further weakness in the AUD/USD pair.
AUD/USD – Technical Analysis
AUD/USD is trading at $0.61964, down 0.28%, as bearish sentiment dominates amid global risk-off conditions. The pair is struggling to maintain ground above its pivot point at $0.62190, signaling potential downside risks.
The 50 EMA at $0.62228 has turned into a near-term resistance level, further weighing on the currency pair. The RSI is hovering in bearish territory, reflecting subdued momentum.
Immediate resistance is located at $0.62730, followed by $0.63058 and $0.63393, marking levels to watch for any bullish recovery.
On the downside, immediate support lies at $0.61781, with stronger support at $0.61488 and $0.61208. A sustained move below the pivot point could trigger further selling pressure, targeting the $0.61781 level initially, followed by $0.61530.
Traders considering short positions might look to enter below $0.62172, targeting $0.61530 with a stop-loss at $0.62523.
While the pair remains bearish in the short term, a break above $0.62190 and the 50 EMA could signal a reversal, paving the way for a test of $0.62730.
However, the broader trend remains cautious as the pair reacts to key technical and macroeconomic drivers.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Resistance Levels: Immediate resistance at $0.63058; further targets at $0.63393 and $0.63835.
- Support Zones: Immediate support at $0.61979; additional levels at $0.61616 and $0.61208.
- Momentum Indicators: RSI at 61 reflects moderate bullish momentum; price remains above the 50 EMA, signaling strength.
AUD/USD is trading at $0.62702, gaining 0.41% in the past 24 hours, as the pair builds momentum above the pivot point at $0.62433.
On the 4-hour chart, the price action reflects bullish sentiment, with the Relative Strength Index (RSI) at 61, indicating moderate strength.
The 50-day Exponential Moving Average (EMA) at $0.62250 provides a solid support base, aligning with the pivot point to sustain the upward trajectory.
Immediate resistance lies at $0.63058, and a break above this level could open the door for further gains toward $0.63393 and $0.63835. These targets align with key Fibonacci retracement levels, enhancing the bullish outlook.
On the downside, immediate support is seen at $0.61979, followed by $0.61616 and $0.61208. A breach below $0.61979 could expose the pair to additional downside risks, challenging the current bullish momentum.
The technical structure indicates a favorable setup for buyers, with the pair holding above the 50 EMA and pivot point.
A sustained move above $0.63058 would confirm the bullish trend, while a failure to maintain this level could trigger consolidation or a pullback.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.62429
Take Profit – 0.63063
Stop Loss – 0.62053
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$634/ -$376
Profit & Loss Per Mini Lot = +$63/ -$37
AUD/USD Price Analysis – Jan 07, 2025
Daily Price Outlook
During the European trading session, the AUD/USD currency pair continued its upward movement, holding steady around the 0.6285 level and even reaching a high of 0.6288, despite weaker-than-expected Building Permits data for November.
However, the rise in the Australian dollar can largely be attributed to the overall positive market sentiment, which tends to favor riskier assets like the Aussie.
Nevertheless, the strength of the US dollar, driven by the Federal Reserve’s hawkish stance, kept a lid on further gains for the AUD/USD pair.
Looking ahead, traders are eyeing the US ISM Services PMI report due later today, with the market also focused on the Federal Reserve’s December meeting minutes set to be released on Wednesday.
Australia's Economic Weakness and China's Uncertainty Pose Risks to AUD/USD Pair
On the data front, Australia’s Building Permits for November 2024 showed a 3.6% month-on-month decline, falling short of the expected 1.0% decrease. This came after a 5.2% rise in October, marking the first decline in three months.
On Wednesday, all eyes will be on Australia’s Monthly Consumer Price Index (CPI) for November. If the data comes in lower than expected, it could increase the chances of a rate cut by the Reserve Bank of Australia (RBA) in February, which could put downward pressure on the Australian dollar.
In China, the services sector showed strong growth in December. The Caixin China Services PMI rose to 52.2, higher than the expected 51.7, signaling the fastest growth since May.
However, the Caixin Manufacturing PMI dropped to 50.5, missing forecasts. China’s economic resilience is seen in reports of continued market openness, with the Shanghai Stock Exchange discussing plans to deepen the opening of capital markets. These economic changes in China often affect Australia due to their close trade ties.
Furthermore, the Judo Bank Australia Composite PMI for December 2024 was revised higher to 50.2, indicating modest growth in the private sector, with the services sector leading the way.
Meanwhile, the services sector in Australia has now grown for the eleventh consecutive month. The People’s Bank of China (PBoC) also hinted at an interest rate cut in the near future, a move that could further influence the Australian economy due to the close trade relationship between the two countries.
Therefore, the weaker-than-expected Australian data, along with potential rate cuts by the RBA and economic uncertainty in China, could put downward pressure on the AUD. This may limit gains for the AUD/USD pair, especially with a strong US dollar.
AUD/USD – Technical Analysis
AUD/USD is trading at $0.62702, gaining 0.41% in the past 24 hours, as the pair builds momentum above the pivot point at $0.62433.
On the 4-hour chart, the price action reflects bullish sentiment, with the Relative Strength Index (RSI) at 61, indicating moderate strength.
The 50-day Exponential Moving Average (EMA) at $0.62250 provides a solid support base, aligning with the pivot point to sustain the upward trajectory.
Immediate resistance lies at $0.63058, and a break above this level could open the door for further gains toward $0.63393 and $0.63835. These targets align with key Fibonacci retracement levels, enhancing the bullish outlook.
On the downside, immediate support is seen at $0.61979, followed by $0.61616 and $0.61208. A breach below $0.61979 could expose the pair to additional downside risks, challenging the current bullish momentum.
The technical structure indicates a favorable setup for buyers, with the pair holding above the 50 EMA and pivot point.
A sustained move above $0.63058 would confirm the bullish trend, while a failure to maintain this level could trigger consolidation or a pullback.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Resistance Levels: Immediate resistance at $0.62755; next at $0.63058 and $0.63393.
- Support Zones: Key support at $0.61845; further levels at $0.61496 and $0.61208.
- Technical Indicators: RSI at 46 signals neutrality; price below 50 EMA at $0.62185 supports bearish momentum.
The AUD/USD pair is trading at $0.62044, up 0.24% in the last session, showing a modest recovery from recent lows. The 4-hour chart positions the pivot point at $0.62433, serving as a key level for traders.
Immediate resistance is seen at $0.62755, followed by $0.63058 and $0.63393, highlighting potential upside targets. On the downside, key support levels are positioned at $0.61845, $0.61496, and $0.61208, providing safety nets against selling pressure.
The Relative Strength Index (RSI) at 46 suggests a neutral stance, signaling room for directional moves. The 50 EMA at $0.62185 reinforces a short-term bearish bias as the price remains below this level.
A sustained move below the $0.62203 entry point may trigger additional selling, with a potential target at $0.61693. Conversely, a break above $0.62433 could open the door to a recovery, targeting the $0.62755 resistance zone.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.62203
Take Profit – 0.61693
Stop Loss – 0.62538
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$510/ -$335
Profit & Loss Per Mini Lot = +$51/ -$33
AUD/USD Price Analysis – Jan 02, 2025
Daily Price Outlook
Despite the downbeat Chinese Manufacturing PMI putting pressure on the Aussie Dollar, the AUD/USD currency pair managed to maintain its upward trend, staying well-supported around the 0.6215 level and even reaching an intra-day high of 0.6223.
However, the reason behind this rise can be traced back to the Reserve Bank of Australia's (RBA) comments.
The RBA board suggested that if future economic data aligns with or falls below expectations, it would strengthen confidence in inflation and create the right conditions to begin easing policy restrictions.
On the other hand, stronger-than-expected data might mean that restrictive policies need to stay in place longer.
RBA Governor Michele Bullock also pointed out that the continued strength of the labor market has made the RBA slower than other countries in beginning its monetary easing cycle.
Weaker Chinese Manufacturing PMI Puts Pressure on AUD/USD Amid Global Economic Uncertainty
On the data front, China's Caixin Manufacturing PMI unexpectedly dropped to 50.5 in December, down from 51.5 in November.
The market had expected a reading of 51.7 for the month. Despite the decline, the data still indicates expansion, with manufacturers' output and demand continuing to grow.
The output gauge stayed in expansion for the 14th straight month, and new orders increased for the third consecutive month.
However, growth in both output and new orders slowed compared to November, as production and sales of investment goods fell, and exports were weaker due to ongoing uncertainties in the global economy and trade.
In addition to the Caixin PMI data, China's official Manufacturing PMI, released by the National Bureau of Statistics (NBS), also showed a slowdown, easing to 50.1 in December from 50.3 in November.
This missed market expectations of 50.3. On a positive note, the Non-Manufacturing PMI rose to 52.2, higher than the 50.0 in November and the forecast of 50.2.
Overall, while manufacturing growth slowed, the non-manufacturing sector showed stronger performance, pointing to mixed economic conditions in China as it faces challenges from both domestic and international factors.
Therefore, the weaker-than-expected Chinese Manufacturing PMI data signals economic challenges, which could dampen demand for commodities and impact Australia's export-driven economy.
As a result, the AUD/USD pair may face downward pressure, reflecting concerns about slowing global growth.
US Dollar Strengthens Amid Fed's Hawkish Stance and Global Uncertainties
On the US front, the US Dollar Index (DXY) has surged to multi-year highs, trading around 108.50. This rise is largely due to the US Federal Reserve’s hawkish stance on interest rates.
The Fed has signaled that it may take a more cautious approach to rate cuts in 2025, which has strengthened the US Dollar.
The shift in policy comes as the market anticipates economic strategies from the incoming Trump administration, which creates uncertainty about future policy changes.
In addition to the Fed's stance, rising geopolitical tensions in the Middle East and the ongoing Russia-Ukraine war are expected to support the US Dollar in the short term.
As a safe-haven currency, the USD tends to strengthen during times of global instability. Traders are also cautious about President-elect Trump’s economic policies, particularly the possibility of higher tariffs, which could increase the cost of living.
These concerns, along with the Fed’s recent projections indicating fewer rate cuts in 2025, suggest that the US Dollar will continue to hold its strength due to ongoing inflationary pressures and global uncertainties.
AUD/USD – Technical Analysis
The AUD/USD pair is trading at $0.62044, up 0.24% in the last session, showing a modest recovery from recent lows. The 4-hour chart positions the pivot point at $0.62433, serving as a key level for traders.
Immediate resistance is seen at $0.62755, followed by $0.63058 and $0.63393, highlighting potential upside targets. On the downside, key support levels are positioned at $0.61845, $0.61496, and $0.61208, providing safety nets against selling pressure.
The Relative Strength Index (RSI) at 46 suggests a neutral stance, signaling room for directional moves. The 50 EMA at $0.62185 reinforces a short-term bearish bias as the price remains below this level.
A sustained move below the $0.62203 entry point may trigger additional selling, with a potential target at $0.61693. Conversely, a break above $0.62433 could open the door to a recovery, targeting the $0.62755 resistance zone.
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