AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Buy Entry: Limit order at $0.66051, targeting $0.66666.
- Immediate Resistance: Watch $0.66434 for a potential breakout.
- Support Levels: Key support at $0.65809; a break below could shift the trend.
The AUD/USD pair is showing a modest uptick, currently trading at $0.66210, which is slightly above its pivot point of $0.66058.
This positioning suggests a bullish sentiment in the short term, especially as the price is holding above the 50-day Exponential Moving Average (EMA) at $0.66015.
The 4-hour chart indicates that the pair is trying to build momentum, with the immediate resistance at $0.66434 being the next hurdle for bulls to overcome.
If the pair can break through this resistance, it may target higher levels at $0.66696 and $0.67019, signaling a continuation of the upward trend.
However, on the downside, the immediate support lies at $0.65809, followed by $0.65471 and $0.65127. These support levels are crucial; a break below them could indicate a shift in sentiment towards a bearish outlook.
The Relative Strength Index (RSI) is currently at 54, which suggests that the market is neither overbought nor oversold, allowing room for further movement in either direction.
With the price hovering around the pivot point and supported by the 50 EMA, the technical outlook leans slightly bullish for now.
For traders looking to enter the market, a buy limit order at $0.66051 could be strategic, with a take profit set at $0.66666. Setting a stop-loss at $0.65707 would help manage risk in case of an unexpected downturn.
AUD/USD - Trade Ideas
Entry Price – Buy Limit 0.66051
Take Profit – 0.66666
Stop Loss – 0.65707
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$615/ -$344
Profit & Loss Per Mini Lot = +$61/ -$34
AUD/USD Price Analysis – Aug 15, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair experienced a bullish trend and drew strong bid around the 0.6628 level, and reaching an intra-day high of 0.6631.
This recovery was fueled by the release of upbeat employment data in Australia and supportive economic signals from China.
The Australian Dollar (AUD) managed to regain some ground after facing downward pressure due to declining commodity prices and mixed economic indicators.
In contrast, the US Dollar (USD) weakened following moderate inflation data that led investors to reassess Federal Reserve (Fed) interest rate expectations.
Impact of Australian Economic Data and RBA Stance on AUD/USD Pair
On the AUD front, the AUD/USD pair's recovery is partly attributed to the Reserve Bank of Australia's (RBA) monetary policy outlook.
Despite challenges from falling copper and iron ore prices, which have added pressure on the commodity-linked currency, the RBA's hawkish stance remains a key support factor.
RBA Governor Michele Bullock emphasized that the central bank is vigilant about inflation risks and is prepared to increase rates further if necessary.
On the data front, the Australian Employment Change for July showed a robust increase of 58.2K, surpassing expectations of 20.0K, although the Unemployment Rate edged up to 4.2% from the anticipated 4.1%.
Additionally, China's economic data, including a 2.7% increase in Retail Sales and a moderate 5.1% rise in Industrial Production, provided a backdrop of cautious optimism.
Despite the positive employment data, Australia's Westpac Consumer Confidence increased by 2.8% in August, reversing a 1.1% decline in July, reflecting improved sentiment.
However, the Wage Price Index for Q2 was slightly below expectations at 0.8%, highlighting ongoing economic uncertainties.
Therefore, the RBA's cautious approach and high wage growth expectations continue to influence the AUD/USD pair, with market participants closely monitoring the central bank's next moves.
Impact of US Economic Data and Fed Rate Cut Expectations on AUD/USD Pair
On the US side, the AUD/USD pair gained momentum as the US Dollar (USD) lost its traction and edged lower amid dovish Federal Reserve’s (Fed) interest rate outlook.
It should be noted that the moderate increase in July’s Consumer Price Index (CPI) to 2.9% year-over-year, coupled with a slight decrease in Core CPI to 3.2%, has fueled speculation about potential Fed rate cuts.
Market expectations currently lean towards a modest 25 basis point cut in September, with a 36% chance of a larger 50 basis point reduction.
However, Federal Reserve officials, including Chicago Fed President Austan Goolsbee and Governor Michelle Bowman, have expressed concerns about inflation risks and the labor market.
These remarks suggest that substantial rate cuts may be less likely, which could temper the US Dollar’s weakness.
AUD/USD - Technical Analysis
The AUD/USD pair is showing a modest uptick, currently trading at $0.66210, which is slightly above its pivot point of $0.66058.
This positioning suggests a bullish sentiment in the short term, especially as the price is holding above the 50-day Exponential Moving Average (EMA) at $0.66015.
The 4-hour chart indicates that the pair is trying to build momentum, with the immediate resistance at $0.66434 being the next hurdle for bulls to overcome.
If the pair can break through this resistance, it may target higher levels at $0.66696 and $0.67019, signaling a continuation of the upward trend.
However, on the downside, the immediate support lies at $0.65809, followed by $0.65471 and $0.65127. These support levels are crucial; a break below them could indicate a shift in sentiment towards a bearish outlook.
The Relative Strength Index (RSI) is currently at 54, which suggests that the market is neither overbought nor oversold, allowing room for further movement in either direction.
With the price hovering around the pivot point and supported by the 50 EMA, the technical outlook leans slightly bullish for now.
For traders looking to enter the market, a buy limit order at $0.66051 could be strategic, with a take profit set at $0.66666. Setting a stop-loss at $0.65707 would help manage risk in case of an unexpected downturn.
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AUD/USD Price Analysis – Aug 13, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair maintained a bullish stance and remained well bid around the 0.6598 level, reaching an intra-day high of 0.6610.
This upward momentum was driven by several factors, including hawkish sentiment surrounding the Reserve Bank of Australia (RBA).
Additionally, Australia's Westpac Consumer Confidence increased by 2.8% in August, reversing the 1.1% decline observed in July, which provided substantial support to the Australian dollar (AUD).
Meanwhile, the US dollar (USD) weakened as markets increasingly priced in the likelihood of Federal Reserve (Fed) interest rate cuts, further enhancing the AUD/USD pair's gains.
Risk-on sentiment in the markets also contributed to the pair's upward movement.
Impact of RBA Stance and Economic Data on AUD/USD Pair
On the AUD front, the AUD/USD pair might rise due to a hawkish stance from the Reserve Bank of Australia (RBA).
RBA Deputy Governor Andrew Hauser pointed out that persistent inflation is driven by weak supply and a tight labor market, with significant uncertainty in economic forecasts.
Westpac has revised its RBA outlook, now expecting the first rate cut in February 2025 instead of November 2024, and increasing its terminal rate forecast to 3.35% from 3.10%.
This shift indicates the RBA is more cautious and needs stronger evidence before cutting rates.
Meanwhile, Treasurer Jim Chalmers challenged the RBA's view on the economy, suggesting that large government budgets are adding to inflation.
Additionally, RBA Governor Michele Bullock stated that the bank is ready to raise rates further if necessary, following a steady rate of 4.35% for six consecutive meetings.
On the data front, Australia's Westpac Consumer Confidence rose by 2.8% in August, reversing a 1.1% drop in July.
The Wage Price Index stayed steady with a 0.8% increase in the second quarter, slightly missing the 0.9% forecast.
In China, the Consumer Price Index (CPI) climbed 0.5% year-on-year in July, surpassing the expected 0.3% and the previous 0.2% increase. The monthly CPI also rose 0.5%, recovering from a 0.2% decline earlier.
Therefore, the hawkish stance from the RBA and increased rate forecast could boost the AUD/USD pair, as higher rates typically strengthen the currency.
Conversely, mixed domestic data and China's CPI rise may add volatility but won't likely overshadow the RBA's impact.
Impact of Fed Rate Cut Expectations on AUD/USD Pair
On the US front, the AUD/USD pair is gaining momentum as the US Dollar faces pressure from expectations of a potential interest rate cut by the Federal Reserve (Fed) in September.
However, the likelihood of a significant 50-basis point cut has diminished. Traders are closely monitoring US producer inflation data on Tuesday and consumer inflation figures on Wednesday for signs that price growth remains steady.
Federal Reserve Governor Michelle Bowman highlighted ongoing inflation risks and strong labor market conditions, suggesting that the Fed might hold off on cutting rates in September.
Additionally, Kansas City Fed President Jeffrey Schmid noted that while reducing monetary policy could be considered if inflation remains low, the current policy is not excessively restrictive, and the Fed is still working toward its 2% inflation target.
Therefore, the AUD/USD pair may gain support as expectations of a Fed rate cut put pressure on the US Dollar.
However, diminished chances of a substantial cut and Fed officials' cautious comments on inflation might limit the pair's potential upside.
AUD/USD - Technical Analysis
The AUD/USD pair is currently trading at $0.66043, up 0.09% on the 4-hour chart. The Australian dollar seems to be gaining some ground as it approaches key resistance levels.
The pivot point at $0.6580 is particularly important today; holding above this level suggests that the bulls may continue to push prices higher.
Immediate resistance is located at $0.6620, with further resistance at $0.6659 and $0.6702. If the price can break through these levels, it could signal a continuation of the upward trend.
On the downside, immediate support is found at $0.6547, followed by stronger support levels at $0.6508 and $0.6475.
The 50-day Exponential Moving Average (EMA) at $0.6540 is providing a solid base for the current bullish momentum.
The Relative Strength Index (RSI) is at 62, indicating that while the pair is in bullish territory, it's not yet overbought, leaving room for further gains.
Given the current technical setup, a buy limit at $0.65804 with a target of $0.66437 and a stop loss at $0.65428 seems to be a balanced approach.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD is holding above the pivot point of $0.6580, signaling potential for further gains.
- Immediate resistance at $0.6620; a break above could extend the bullish trend.
- Support at $0.6547; staying above this level maintains the bullish outlook.
The AUD/USD pair is currently trading at $0.66043, up 0.09% on the 4-hour chart. The Australian dollar seems to be gaining some ground as it approaches key resistance levels.
The pivot point at $0.6580 is particularly important today; holding above this level suggests that the bulls may continue to push prices higher.
Immediate resistance is located at $0.6620, with further resistance at $0.6659 and $0.6702. If the price can break through these levels, it could signal a continuation of the upward trend.
On the downside, immediate support is found at $0.6547, followed by stronger support levels at $0.6508 and $0.6475.
The 50-day Exponential Moving Average (EMA) at $0.6540 is providing a solid base for the current bullish momentum.
The Relative Strength Index (RSI) is at 62, indicating that while the pair is in bullish territory, it's not yet overbought, leaving room for further gains.
Given the current technical setup, a buy limit at $0.65804 with a target of $0.66437 and a stop loss at $0.65428 seems to be a balanced approach.
AUD/USD - Trade Ideas
Entry Price – Buy Limit 0.65804
Take Profit – 0.66437
Stop Loss – 0.65428
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$633/ -$376
Profit & Loss Per Mini Lot = +$63/ -$37
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD is trading at $0.65553, up 0.57%.
- RSI indicates moderately bullish sentiment at 56.
- Entry: Buy Limit at $0.65235, Take Profit at $0.66096, Stop Loss at $0.64865.
The AUD/USD pair is currently trading at $0.65553, reflecting a 0.57% increase on the day. On the 4-hour chart, the pivotal point to watch is $0.6511.
Immediate resistance levels are marked at $0.6576, $0.6610, and $0.6643, while support levels are positioned at $0.6475, $0.6436, and $0.6402. These levels are crucial in determining the pair's next move.
The Relative Strength Index (RSI) stands at 56, suggesting a moderately bullish sentiment. The 50-day Exponential Moving Average (EMA) is currently at $0.6523, indicating a slight upward trend.
If the price remains above the pivot point, it could signify continued bullish momentum. However, a fall below this level might shift the sentiment to bearish.
Given the current market conditions, a strategic entry at a buy limit order of $0.65235 is recommended, with a take profit target at $0.66096 and a stop loss at $0.64865.
AUD/USD - Trade Ideas
Entry Price – Buy Limit 0.65235
Take Profit – 0.66096
Stop Loss – 0.64865
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$861/ -$370
Profit & Loss Per Mini Lot = +$86/ -$37
AUD/USD Price Analysis – Aug 08, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair maintained its upward trend and remained well bid around the 0.6554 level, hitting an intra-day high of 0.6565. This upward trend can be attributed to Reserve Bank of Australia (RBA) Governor Michelle Bullock's hawkish guidance on interest rates, which supported the Australian dollar and contributed to the AUD/USD pair's gains.
Meanwhile, the US dollar losing traction was another key factor keeping the AUD/USD pair higher. However, market sentiment remains risk-averse due to fears of a potential global slowdown, which could cap gains in the AUD/USD pair as it undermines riskier assets, including the Australian dollar.
RBA's Hawkish Outlook Strengthens Australian Dollar and AUD/USD Pair
On the AUD front, the Australian dollar strengthened following Reserve Bank of Australia (RBA) Governor Michelle Bullock's hawkish outlook on interest rates. During a talk at the Rotary Club of Armidale, she emphasized that the RBA is prepared to increase the Official Cash Rate (OCR) to manage inflation risks.
Bullock also noted that inflation is unlikely to return to the target range of 2-3% before the end of 2025. Her comments show the RBA's strong commitment to controlling inflation, which boosted confidence in the Australian dollar and led to its increase in value.
She noted that the inflation rate is unlikely to return to the 2-3% target range before the end of 2025. This assertive stance on inflation and potential rate hikes bolstered the Australian dollar, reflecting increased confidence in the RBA's commitment to managing economic pressures.
Therefore, the hawkish stance by RBA Governor Bullock likely supports the Australian dollar, potentially strengthening the AUD/USD pair as markets anticipate further rate hikes and increased inflation vigilance.
US Dollar Pressure and Fed Rate Cut Speculation Boost AUD/USD
On the US front, the broad-based US dollar remained under pressure, struggling to gain traction amid softer economic data signaling a faster-than-expected slowdown in the world's largest economy. This has fueled speculation about larger interest rate cuts by the Federal Reserve, thereby supporting the non-yielding yellow metal, gold.
On the economic data front, government figures released on Tuesday showed that the US trade deficit narrowed by 2.5%, decreasing to $73.1 billion in June from $75.0 billion in May. This reduction was primarily driven by a 1.5% rise in exports, particularly in aircraft and US-produced oil and gas.
As a result, markets are now fully pricing in a 100% likelihood that the Federal Reserve will begin lowering borrowing costs at its upcoming policy meeting in September, with nearly a 70% probability of a 50-basis-point rate cut.
Therefore, the pressure on the US dollar and speculation about Fed rate cuts could strengthen the AUD/USD pair, as lower US interest rates may make the Australian dollar more attractive relative to the greenback.
AUD/USD - Technical Analysis
The AUD/USD pair is currently trading at $0.65553, reflecting a 0.57% increase on the day. On the 4-hour chart, the pivotal point to watch is $0.6511.
Immediate resistance levels are marked at $0.6576, $0.6610, and $0.6643, while support levels are positioned at $0.6475, $0.6436, and $0.6402. These levels are crucial in determining the pair's next move.
The Relative Strength Index (RSI) stands at 56, suggesting a moderately bullish sentiment. The 50-day Exponential Moving Average (EMA) is currently at $0.6523, indicating a slight upward trend.
If the price remains above the pivot point, it could signify continued bullish momentum. However, a fall below this level might shift the sentiment to bearish.
Given the current market conditions, a strategic entry at a buy limit order of $0.65235 is recommended, with a take profit target at $0.66096 and a stop loss at $0.64865.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD trades at $0.64982, up 0.22%, with bullish sentiment below the $0.6538 pivot point.
- RSI at 47 indicates a neutral market; the 50-day EMA suggests resistance at $0.6526.
- Sell below $0.65234 with a take-profit at $0.64399; stop-loss set at $0.65687 for risk management.
The Australian Dollar (AUD) is showing modest strength against the US Dollar, with the AUD/USD pair trading at $0.64982, up 0.22% on the day. The currency pair is experiencing a short-term bullish trend, although it remains below the key pivot point of $0.6538.
Immediate resistance is found at $0.6569, with further hurdles at $0.6610 and $0.6643. The AUD/USD must break through these resistance levels to establish a stronger upward trajectory.
On the downside, immediate support is located at $0.6481, followed by additional support levels at $0.6439 and $0.6402.
These levels serve as critical markers for traders seeking to manage risk, as a decline below them could signify renewed bearish momentum.
The 50-day Exponential Moving Average (EMA) is currently at $0.6526, slightly above the current price, which could act as a barrier to further gains if the pair struggles to maintain its upward momentum.
The Relative Strength Index (RSI) is at 47, suggesting that the pair is neither overbought nor oversold.
This neutral reading indicates a balanced market, providing an opportunity for traders to capitalize on potential breakout or breakdown scenarios.
Given the current technical setup, the recommended strategy is to consider selling below $0.65234, with a take-profit target of $0.64399 and a stop-loss at $0.65687 to manage potential reversals.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.65234
Take Profit – 0.64399
Stop Loss – 0.65687
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$83/ -$453
Profit & Loss Per Mini Lot = +$83/ -$45
AUD/USD Price Analysis – Aug 06, 2024
Daily Price Outlook
Despite the RBA's hawkish stance, the AUD/USD currency pair continued its downward trend, trading around the 0.6481 level and hitting an intra-day low of 0.6473.
This decline can be attributed to the US dollar's mild strength, bolstered by the surge in Treasury bond yields, which has continued to exert pressure on the AUD/USD pair.
Furthermore, the escalating geopolitical tensions in the Middle East have undermined the riskier Australian dollar, contributing to further losses.
Moving ahead, traders are watching Tuesday’s US Trade Balance data, the only release for the day, which could impact the USD if bond yields fluctuate.
Risk sentiment will also play a role, while the upcoming Chinese Trade Balance data on Wednesday may influence the AUD/USD pair.
RBA’s Steady Rates and Positive Equity Markets Support AUD/USD, but Economic Concerns Limit Gains
On the AUD front, the Australian Dollar (AUD) gained some traction earlier on Tuesday after the Reserve Bank of Australia (RBA) decided to keep interest rates unchanged and maintain a tight policy to address ongoing inflation.
RBA Governor Michele Bullock supported this decision, noting that controlling inflation might take longer and could require higher rates for a while. This positive outlook, combined with a rise in global equity markets, helped boost the AUD/USD pair.
However, concerns about a potential economic downturn especially given the AUD’s sensitivity to Chinese economic conditions are limiting further gains.
Therefore, the RBA's decision to keep rates steady and maintain a restrictive policy, combined with a positive shift in global equity markets, supported the AUD/USD pair. However, concerns about a potential economic downturn are capping further gains.
Economic Uncertainty and Fed Speculation Keep AUD/USD Under Pressure
On the US front, the recent economic data showing declines in US manufacturing and slower job growth has raised recession fears and speculation about potential Federal Reserve rate cuts. This has led to a drop in US Treasury yields, which impacted the AUD/USD pair.
Despite this, San Francisco Fed President Mary Daly's reassurance that the job market slowdown isn’t a major concern has kept the US dollar relatively supported. The combination of a modestly stronger US dollar and broader economic uncertainties has kept the AUD/USD pair under pressure.
AUD/USD - Technical Analysis
The Australian Dollar (AUD) is showing modest strength against the US Dollar, with the AUD/USD pair trading at $0.64982, up 0.22% on the day.
The currency pair is experiencing a short-term bullish trend, although it remains below the key pivot point of $0.6538.
Immediate resistance is found at $0.6569, with further hurdles at $0.6610 and $0.6643. The AUD/USD must break through these resistance levels to establish a stronger upward trajectory.
On the downside, immediate support is located at $0.6481, followed by additional support levels at $0.6439 and $0.6402. These levels serve as critical markers for traders seeking to manage risk, as a decline below them could signify renewed bearish momentum.
The 50-day Exponential Moving Average (EMA) is currently at $0.6526, slightly above the current price, which could act as a barrier to further gains if the pair struggles to maintain its upward momentum.
The Relative Strength Index (RSI) is at 47, suggesting that the pair is neither overbought nor oversold.
This neutral reading indicates a balanced market, providing an opportunity for traders to capitalize on potential breakout or breakdown scenarios.
Given the current technical setup, the recommended strategy is to consider selling below $0.65234, with a take-profit target of $0.64399 and a stop-loss at $0.65687 to manage potential reversals.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD at $0.65284, eyes pivot point $0.6542 amid bearish momentum.
- RSI at 47 indicates consolidation; potential range-bound trading near key supports.
- Consider shorting below $0.65391; target $0.64931, stop loss at $0.65718.
The AUD/USD pair is trading at $0.65284, reflecting a decline of 0.18% as the currency struggles to maintain upward momentum amidst a strengthening U.S. dollar.
On the 4-hour chart, the pair is navigating just below the pivot point at $0.6542, a crucial threshold that could determine near-term direction. The current price action suggests potential for further declines, especially if the pair fails to reclaim ground above this pivot level.
Immediate resistance is seen at $0.6569, with subsequent hurdles at $0.6610 and $0.6643. These levels are key for bulls looking to reassert control and drive prices higher.
However, with the Relative Strength Index (RSI) at 47, the pair is hovering near the midpoint, indicating a lack of definitive momentum and the possibility of further consolidation.
On the downside, immediate support is located at $0.6493, with additional supports at $0.6459 and $0.6423. These levels are critical for maintaining the current trading range and could attract buyers if the AUD/USD tests these lows.
The 50-day Exponential Moving Average (EMA) at $0.6541 is slightly above the current price, suggesting that bearish pressures may persist unless a decisive move above this average occurs.
Traders might consider entering a short position below $0.65391, targeting a take profit at $0.64931, with a stop loss at $0.65718 to mitigate risk.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.65391
Take Profit – 0.64931
Stop Loss – 0.65718
Risk to Reward – 1: 1.4
Profit & Loss Per Standard Lot = +$460/ -$327
Profit & Loss Per Mini Lot = +$46/ -$32
AUD/USD Price Analysis – Aug 01, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair failed to stop its downward rally and remained under pressure around the 0.6528 level, hitting an intra-day low of 0.6514.
This decline in the AUD/USD pair can be attributed to the renewed strength of the US dollar, which gained traction due to robust economic data and expectations for Federal Reserve policy adjustments.
Despite the Federal Reserve's dovish guidance on interest rates, the US dollar has appreciated, making the Australian dollar less attractive.
Furthermore, the latest inflation report released on Wednesday has reduced expectations that the Reserve Bank of Australia (RBA) will implement another rate hike at its policy meeting next week.
This was seen as another key factor that undermined the AUD currency and contributed to the AUD/USD pair losses.
US Dollar Strength and Anticipated Economic Data Likely to Weaken AUD/USD
On the US front, the broad-based US dollar has seen significant bullish momentum, with the US Dollar Index (DXY) rebounding strongly to 104.20 from an intraday low of 103.86.
This rise in the US dollar is primarily due to market expectations of a robust US economy, despite the Federal Reserve's dovish guidance on interest rates. This has made the Australian dollar less attractive to investors.
On the data front, investors are keenly awaiting the US ISM Manufacturing PMI report for July, set for release at 14:00 GMT.
The PMI is expected to rise slightly to 48.8 from June’s 48.5, indicating continued contraction in manufacturing. Furthermore, the Manufacturing Prices Paid index is predicted to grow more slowly at 51.8, suggesting a moderation in inflation.
The key event for the FX market will be the US Nonfarm Payrolls (NFP) report on Friday, with expectations of a hiring increase of 175K in July, down from 206K. The Unemployment Rate is forecasted to hold steady at 4.1%, while wage growth is expected to slow to 3.7% annually.
Therefore, the US dollar’s strength and anticipated economic data, including the ISM Manufacturing PMI and Nonfarm Payrolls report, are likely to put downward pressure on the AUD/USD pair. The stronger US dollar makes the Australian dollar less attractive to investors.
Mixed Economic Data and Lower RBA Rate Hike Expectations Pressure AUD/USD
On the AUD front, better-than-expected Trade Balance data combined with a softer inflation report has lowered expectations for a Reserve Bank of Australia (RBA) rate hike at the upcoming policy meeting. Economists caution that further rate increases could jeopardize Australia's economic recovery.
Consequently, markets are now pricing in a 50% chance of an RBA rate cut in November, much earlier than the previously anticipated April next year. National Australia Bank (NAB) expects the RBA's cash rate to remain at 4.35% until May 2025, then decline to 3.6% by December 2025, with further decreases in 2026.
On the data front, Australia reported a trade surplus of 5,589 million for June, beating the expected 5,000 million but down from 5,773 million previously. The Judo Bank Manufacturing PMI rose slightly to 47.5 in July, indicating continued but slower deterioration in manufacturing conditions.
Meanwhile, the Monthly CPI increased by 3.8% year-over-year to June, easing from 4% in May, while the RBA Trimmed Mean CPI rose by 3.9% YoY, just under the forecast of 4.0%. Building Permits fell by 6.5% in June, worse than the 3.0% decline expected, but improved from a 3.7% YoY drop in May.
Therefore, the mixed economic data, including a trade surplus and weaker inflation, combined with reduced expectations for an RBA rate hike, has put pressure on the AUD. This could lead to a potential weakening of the AUD/USD pair in the near term.
AUD/USD - Technical Analysis
The AUD/USD pair is trading at $0.65284, reflecting a decline of 0.18% as the currency struggles to maintain upward momentum amidst a strengthening U.S. dollar. On the 4-hour chart, the pair is navigating just below the pivot point at $0.6542, a crucial threshold that could determine near-term direction.
The current price action suggests potential for further declines, especially if the pair fails to reclaim ground above this pivot level.
Immediate resistance is seen at $0.6569, with subsequent hurdles at $0.6610 and $0.6643. These levels are key for bulls looking to reassert control and drive prices higher.
However, with the Relative Strength Index (RSI) at 47, the pair is hovering near the midpoint, indicating a lack of definitive momentum and the possibility of further consolidation.
On the downside, immediate support is located at $0.6493, with additional supports at $0.6459 and $0.6423. These levels are critical for maintaining the current trading range and could attract buyers if the AUD/USD tests these lows.
The 50-day Exponential Moving Average (EMA) at $0.6541 is slightly above the current price, suggesting that bearish pressures may persist unless a decisive move above this average occurs.
Traders might consider entering a short position below $0.65391, targeting a take profit at $0.64931, with a stop loss at $0.65718 to mitigate risk.
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