AUD/USD Price Analysis – Oct 10, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair found itself in positive territory on Thursday, breaking a five-day losing streak and trading around 0.6730 level. This upward movement can be linked to a risk-on market sentiment, which generally supports the Australian dollar (AUD) and helped boost the pair’s value.
However, the stronger US dollar (USD) is casting a shadow, fueled by growing speculation that the Federal Reserve may implement a 25 basis point rate cut in November, putting pressure on the Aussie in the near term.
Moreover, recent efforts by Beijing to stimulate its economy fell short of expectations, disappointing investors.
China's top economic planning authority did not announce any new measures to boost growth, which raises concerns, especially since China is one of Australia’s major trading partners.
These worries about China's slowing economy could weigh on the value of the Australian dollar, highlighting the interconnectedness of global economies.
Fed Rate Cut and Its Impact on AUD/USD Pair
On the US front, the stronger US dollar is facing potential challenges as speculation grows around a possible 25 basis point rate cut by the Federal Reserve in November. Investors are keeping a close eye on the upcoming Consumer Price Index (CPI) inflation data, which will be released later on Thursday.
Notably, the headline CPI is expected to show a 2.3% year-over-year increase for September, while core CPI inflation is projected to rise by 3.2% in the same period.
If the report reveals softer inflation than expected, it could increase the likelihood of a significant Fed rate cut, which might weaken the dollar and support the Australian dollar (AUD).
In the meantime, the recent comments from Federal Reserve officials also suggest the possibility of rate cuts.
San Francisco Fed President Mary Daly mentioned that one or two more cuts could happen this year if economic conditions align with her expectations, expressing confidence that inflation is moving toward the Fed's 2% target.
Similarly, Boston Fed President Susan Collins indicated that weaker inflation trends make further rate reductions likely. Markets are currently pricing in nearly an 80% chance of a 25 basis point cut in November, a significant rise from 31.1% just last week, according to the CME FedWatch Tool.
Therefore, the potential for a Fed rate cut and softer inflation data could weaken the US dollar, providing support for the AUD/USD pair. This environment may help the Australian dollar recover some of its losses, counteracting the stronger dollar's influence.
Impact of China's Economic Challenges on the AUD/USD Pair
On the other side, Beijing's efforts to boost the economy have left investors disappointed, as the country's top economic planning authority did not introduce new measures to address slowing growth.
This is significant because China is a major trading partner for Australia, and concerns about its economic performance typically weaken the Australian dollar (AUD).
Meanwhile, the Reserve Bank of Australia's (RBA) September meeting minutes indicated that board members noted there would be no rate cuts in the near future but want to remain flexible to see if the economy improves later this year.
This approach keeps the possibility open for a neutral stance by the end of the year, with potential rate cuts in early 2025. ANZ analysts predict that the first cash rate cut may occur in February 2025.
Furthermore, the World Bank has forecasted a slowdown in China’s growth rate to 4.3% in 2025, down from a projected 4.8% this year.
Therefore, the disappointment in China's economic efforts and forecasts of slower growth are likely to weaken the Australian dollar (AUD), which may lead to a bearish outlook for the AUD/USD pair as investors react to these economic signals.
AUD/USD - Technical Analysis
The Australian Dollar (AUD/USD) is trading at $0.67392, up 0.33%, signaling a potential rebound from recent lows. On the 4-hour chart, the pair is testing the pivot point at $0.67389, which aligns with a minor support level.
If the AUD/USD sustains its position above this level, it could target the immediate resistance at $0.67621, followed by the 50-day Exponential Moving Average (EMA) at $0.67612.
A successful breakout above the 50-day EMA would pave the way for further gains toward the next resistance levels at $0.67861 and $0.68105.
Conversely, if the AUD/USD fails to hold above $0.67389, the pair may encounter initial support at $0.67108, followed by deeper support levels at $0.66915 and $0.66708.
A breach below $0.66708 would likely signal increased bearish pressure, exposing the pair to further downside risks.
The Relative Strength Index (RSI) stands at 50, indicating neutral market sentiment. This suggests that AUD/USD could move in either direction depending on whether it breaks above or below the current pivot level.
With the RSI at equilibrium, traders should watch for a clear breakout above $0.67621 or a breakdown below $0.67108 for directional cues.
Given the current technical setup, buying interest above $0.67223 could drive the pair toward $0.67616, while a failure to maintain above this level may trigger selling pressure.
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AUD/USD Price Analysis – Oct 08, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair has continued its bearish trend, trading around the 0.6734 level and hitting an intra-day low of 0.6715. This downward movement can be attributed to risk-off market sentiment, which tends to undermine riskier assets like the Australian dollar (AUD), contributing to the pair's losses. Moreover, comments from the National Development and Reform Commission during a recent press conference have further pressured the AUD/USD.
However, the losses could be short-lived due to the hawkish stance of the Reserve Bank of Australia (RBA) following its September Meeting Minutes. Meanwhile, the US dollar has slightly weakened despite strong jobs report for September has tempered expectations for aggressive rate cuts by the Federal Reserve. Hence, the bearish US dollar provides some support to the AUD/USD pair to limit its losses.
Looking ahead, investors are eager for insights from Fed officials later on Tuesday, as well as the Federal Open Market Committee (FOMC) Minutes. All eyes will then turn to the US Consumer Price Index (CPI) for September, set to be released on Thursday, which could significantly influence market direction.
Australian Dollar Under Pressure Amid Economic Concerns and RBA Caution
As we mentioned above, the Australian dollar is losing traction due to comments from the National Development and Reform Commission during a press conference. China's state planner indicated that the country's economy is facing a more complex internal and external environment, disappointing traders who were hoping for significant stimulus measures. Meanwhile, escalating geopolitical tensions in the Middle East have created a risk-off sentiment in the market, putting further selling pressure on riskier assets like the AUD.
Furthermore, the Reserve Bank of Australia (RBA) released its September Meeting Minutes on Tuesday, revealing that board members discussed future scenarios for both lowering and raising interest rates. The Minutes stated, “Policy will need to remain restrictive until Board members are confident inflation is moving sustainably towards the target range.”
RBA Deputy Governor Andrew Hauser emphasized that the central bank will take action only when inflation is no longer high and persistent. He noted that reducing inflation is a significant task and that they are not finished yet. This cautious approach suggests that the RBA is focused on maintaining stability amid current economic challenges.
Therefore, the news is likely to weaken the AUD/USD pair as risk-off sentiment and disappointing Chinese economic signals undermine the Australian dollar. The RBA's cautious stance on interest rates further contributes to bearish pressure on the AUD against the US dollar.
US Dollar Weakens Amid Strong Jobs Report and Cautious Fed Outlook
On the US front, the broad-based US dollar lost some of its gains on Tuesday. However, a strong jobs report for September has led to reduced expectations for aggressive rate cuts by the Federal Reserve. This report highlights a robust labor market, prompting investors to lower their bets on significant interest rate cuts. As a result, demand for gold, which is a non-yielding asset, has also been negatively affected. According to the CME's FedWatch tool, there is now an 85% chance of a 25 basis point rate cut at the Fed's next meeting in November.
Meanwhile, Federal Reserve officials are shifting their focus from concerns about high inflation to the potential risks of rising unemployment. Minneapolis Fed President Neel Kashkari pointed out this shift, while St. Louis Fed President Alberto Musalem noted that further interest rate cuts would depend on economic performance.
Traders are remaining cautious as they await important US inflation data, including the Consumer Price Index (CPI) and Producer Price Index (PPI), as well as the minutes from the Federal Open Market Committee (FOMC) meeting, both of which are due this week. These reports could significantly influence gold prices and market sentiment.
AUD/USD - Technical Analysis
The AUD/USD pair is currently trading at 0.67354, down 0.51% for the day, following a consistent bearish trend. This decline has pushed the pair below its key pivot point at 0.67678, indicating potential for further downside movement in the near term.
The 4-hour chart suggests that the pair is struggling to regain upward momentum as it hovers around immediate support at 0.67149. Should the price break below this support, the next targets would be at 0.66845 and 0.66569.
The Relative Strength Index (RSI) is hovering at 28, indicating that the pair is in oversold territory and may be due for a short-term corrective bounce. However, the bearish pressure remains strong as AUD/USD trades below its 50-day Exponential Moving Average (EMA) at 0.68150, suggesting that any upward moves could be limited by this resistance level.
On the upside, a move above the immediate resistance at 0.68078 could signal a potential reversal, with subsequent targets at 0.68417 and 0.68884. However, the overall technical sentiment favors further bearishness, particularly if prices continue to stay below the 0.67678 pivot point.
Given the current technical setup, traders should consider selling below 0.67671 with a take profit target at 0.67144 and a stop loss at 0.68050. However, any break above 0.68078 could shift sentiment toward a potential short-term recovery.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Oversold Conditions: RSI is at 28, suggesting the possibility of a short-term bounce.
- Bearish Momentum: AUD/USD remains below its 50-day EMA at 0.68150, indicating a strong downtrend.
- Key Levels to Watch: A break below 0.67149 support could open the door to further declines toward 0.66845.
The AUD/USD pair is currently trading at 0.67354, down 0.51% for the day, following a consistent bearish trend. This decline has pushed the pair below its key pivot point at 0.67678, indicating potential for further downside movement in the near term.
The 4-hour chart suggests that the pair is struggling to regain upward momentum as it hovers around immediate support at 0.67149. Should the price break below this support, the next targets would be at 0.66845 and 0.66569.
The Relative Strength Index (RSI) is hovering at 28, indicating that the pair is in oversold territory and may be due for a short-term corrective bounce. However, the bearish pressure remains strong as AUD/USD trades below its 50-day Exponential Moving Average (EMA) at 0.68150, suggesting that any upward moves could be limited by this resistance level.
On the upside, a move above the immediate resistance at 0.68078 could signal a potential reversal, with subsequent targets at 0.68417 and 0.68884. However, the overall technical sentiment favors further bearishness, particularly if prices continue to stay below the 0.67678 pivot point.
Given the current technical setup, traders should consider selling below 0.67671 with a take profit target at 0.67144 and a stop loss at 0.68050. However, any break above 0.68078 could shift sentiment toward a potential short-term recovery.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.67671
Take Profit – 0.67144
Stop Loss – 0.68050
Risk to Reward – 1: 1.3
Profit & Loss Per Standard Lot = +$527/ -$379
Profit & Loss Per Mini Lot = +$52/ -$37
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bearish Momentum Intact: AUD/USD remains pressured below the pivot point at $0.68873, with the 50 EMA at $0.69022 reinforcing a downtrend.
- RSI Nearing Oversold: The RSI at 37 suggests the pair is approaching oversold conditions, but a clear buy signal has not yet emerged.
- Critical Support Levels: Immediate support at $0.68423; a break below could target $0.68211 and $0.67994.
The Australian Dollar (AUD) is losing ground against the U.S. Dollar (USD), currently trading at $0.68622, down 0.33% for the session. The bearish pressure comes amid heightened risk aversion, as investors digest mixed U.S. economic data and concerns over China’s economic slowdown, which is weighing on commodity-linked currencies like the AUD.
The 4-hour chart shows that the AUD/USD pair is struggling to hold above its pivot point at $0.68873, indicating sellers are dominating the market. Immediate support is found at $0.68423, with subsequent support levels at $0.68211 and $0.67994.
The technical indicators reinforce a cautious outlook. The 50-day Exponential Moving Average (EMA) hovers at $0.69022, well above the current price, underscoring the bearish momentum. Meanwhile, the Relative Strength Index (RSI) is at 37, approaching oversold territory but not yet signaling a reversal. Traders should remain vigilant as a break below $0.68423 could see the AUD/USD pair testing deeper support levels.
Immediate resistance stands at $0.69160, and for any significant recovery, the pair would need to surpass this barrier, targeting $0.69403 and $0.69622 as next upside objectives. The short-term outlook remains bearish, particularly if the pair continues to trade below its 50 EMA, which could open doors for further declines.
Conclusion: Traders might consider entering short positions below $0.6878, aiming for a take profit around $0.68426, while maintaining a stop-loss at $0.69051 to manage risk effectively.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.6878
Take Profit – 0.68426
Stop Loss – 0.69051
Risk to Reward – 1: 1.3
Profit & Loss Per Standard Lot = +$354/ -$271
Profit & Loss Per Mini Lot = +$35/ -$27
AUD/USD Price Analysis – Oct 03, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair has extended its downward trend, currently hovering around 0.6843 and hitting an intra-day low of 0.6841.
This decline is largely driven by the bullish performance of the US Dollar (USD), influenced by key economic data released on Thursday.
Moreover, a risk-off sentiment in the market has added to the downward pressure on the AUD/USD pair, as rising geopolitical tensions in the Middle East have shaken investor confidence.
According to the Israeli Broadcasting Authority (IBA), Israel's security cabinet has decided to take decisive action in response to a recent Iranian attack. On Tuesday night, Iran launched over 200 ballistic missiles and drones targeting Israel, escalating tensions in the region.
Despite these challenges, the downside risk for the AUD could be limited due to the hawkish stance of the Reserve Bank of Australia (RBA).
Recent data showed stronger-than-expected retail sales growth for August, reducing the chances of an early rate cut by the RBA.
Besides this, the AUD is receiving some support from stimulus measures implemented by China, Australia’s largest trading partner, which have helped boost commodity prices.
Impact of Strong US Labor Market Data on AUD/USD Pair
On the US front, the broad-based US dollar is gaining strength as recent economic data highlights a resilient labor market. This has led to tempered expectations for aggressive interest rate cuts by the Federal Reserve (Fed).
According to the CME FedWatch Tool, there’s a 65.4% chance of a 25 basis point rate cut in November, while the likelihood of a 50 basis point cut is at 34.6%, down from 57.4% just a week ago.
Tom Barkin, President of the Federal Reserve Bank of Richmond, emphasized that the fight against inflation isn’t over, noting that while a 50 basis point cut in September was justified, risks still exist.
Recent reports show positive employment trends, with the ADP Employment Change report revealing an increase of 143,000 jobs in September, exceeding the forecast of 120,000. Annual pay also rose by 4.7%.
However, the AiG Industry Index improved slightly but still indicates contraction for the 29th month in a row. The AiG Manufacturing PMI continued to decline, reaching its lowest level since the series began.
Meanwhile, Fed Chairman Jerome Powell stated that the central bank is not rushing to cut rates further, indicating that any future rate changes are likely to be more modest.
Therefore, the strengthening US dollar, driven by positive labor market data and tempered rate cut expectations, is likely to put further downward pressure on the AUD/USD pair, as investors may favor the USD over the Australian dollar in the current environment.
Positive Economic Indicators Support Australian Dollar Amid Global Uncertainties
Moreover, the downside risk for the Australian dollar (AUD) could be limited due to the hawkish outlook of the Reserve Bank of Australia (RBA). Recent data revealed stronger-than-expected retail sales growth of 0.7% month-over-month in August, surpassing forecasts of a 0.4% increase.
This growth has lowered the chances of an early rate cut by the RBA, with markets almost fully discounting a rate cut in November. In the meantime, stimulus measures from China, Australia’s largest trading partner, have boosted commodity prices, providing further support to the AUD.
In terms of trade balance, Australia recorded a surplus of 5,644 million in August, exceeding market expectations of 5,500 million and slightly higher than July’s surplus of 5,636 million.
However, both exports and imports saw a decline of 0.2% month-over-month during this period. The Judo Bank Services Purchasing Managers' Index (PMI) stood at 50.5 in September, down from 52.5 in August, indicating continued growth in services activity but at a slower pace.
Meanwhile, the Composite PMI dipped slightly to 49.6 in September from 49.8 the previous month, suggesting a slight contraction in overall economic activity.
Therefore, the hawkish stance of the Reserve Bank of Australia, supported by strong retail sales growth and a positive trade balance, bolster the AUD against the USD, mitigating some downward pressure on the AUD/USD pair amid global uncertainties.
AUD/USD - Technical Analysis
The Australian Dollar (AUD) is losing ground against the U.S. Dollar (USD), currently trading at $0.68622, down 0.33% for the session.
The bearish pressure comes amid heightened risk aversion, as investors digest mixed U.S. economic data and concerns over China’s economic slowdown, which is weighing on commodity-linked currencies like the AUD.
The 4-hour chart shows that the AUD/USD pair is struggling to hold above its pivot point at $0.68873, indicating sellers are dominating the market. Immediate support is found at $0.68423, with subsequent support levels at $0.68211 and $0.67994.
The technical indicators reinforce a cautious outlook. The 50-day Exponential Moving Average (EMA) hovers at $0.69022, well above the current price, underscoring the bearish momentum.
Meanwhile, the Relative Strength Index (RSI) is at 37, approaching oversold territory but not yet signaling a reversal. Traders should remain vigilant as a break below $0.68423 could see the AUD/USD pair testing deeper support levels.
Immediate resistance stands at $0.69160, and for any significant recovery, the pair would need to surpass this barrier, targeting $0.69403 and $0.69622 as next upside objectives.
The short-term outlook remains bearish, particularly if the pair continues to trade below its 50 EMA, which could open doors for further declines.
Conclusion: Traders might consider entering short positions below $0.6878, aiming for a take profit around $0.68426, while maintaining a stop-loss at $0.69051 to manage risk effectively.
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USD/JPY Price Analysis – Oct 03, 2024
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Pivot Point Support at $0.69069: The pair’s ability to hold above this level is crucial for maintaining a bullish bias.
- RSI Near Neutral at 48: Momentum is evenly balanced, suggesting no imminent overbought or oversold conditions.
- Resistance at $0.69403 in Focus: A decisive break above this level could propel AUD/USD towards $0.69622 and higher.
The Australian dollar (AUD) continues to edge higher against the U.S. dollar (USD), maintaining a cautious upward trajectory. As of the latest trading session, the AUD/USD pair is trading at $0.69223, marking a slight 0.15% increase.
This recent climb positions the pair above its pivot point at $0.69069, suggesting a potential for further gains if key resistance levels are breached.
Immediate resistance is observed at $0.69403, followed by additional hurdles at $0.69622 and $0.69823. The 50-day Exponential Moving Average (EMA) is currently situated at $0.69140, serving as a critical support area that underpins the current bullish bias.
A sustained hold above this level could reinforce the bullish outlook, encouraging further buying interest.
The Relative Strength Index (RSI) reads 48, signaling neutral momentum with a slight inclination towards the upside. This neutral reading suggests that the market is not yet overbought or oversold, offering room for additional price movement in either direction.
On the downside, immediate support is identified at $0.68886. Should the price break below this level, it could trigger a deeper correction towards $0.68696 and $0.68478, where buyers might step in.
Given the technical setup, a potential buy entry above $0.69069 appears favorable, targeting $0.69406 while maintaining a stop-loss just below immediate support at $0.68886.
The AUD/USD’s recent resilience hints at a measured bullish sentiment, provided it remains above the 50-EMA.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.69069
Take Profit – 0.69406
Stop Loss – 0.68886
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$337/ -$183
Profit & Loss Per Mini Lot = +$33/ -$18
AUD/USD Price Analysis – Oct 01, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair maintained its upward momentum, trading strongly around the 0.6920 level and reaching an intraday high of 0.6935, driven by strong Retail Sales data.
However, the Australian Bureau of Statistics (ABS) reported a month-over-month increase in consumer spending of 0.7% for August, significantly exceeding market expectations of a 0.4% rise.
This positive development, coupled with the Reserve Bank of Australia's (RBA) hawkish stance on interest rates, has further supported the Australian Dollar.
It should be noted that RBA held its cash rate steady at 4.35% for the seventh consecutive meeting, highlighting the necessity of a restrictive policy to combat inflation.
Moreover, China’s recent stimulus measures have bolstered the demand outlook in Australia’s largest trading partner, driving up commodity prices and further strengthening the commodity-linked Australian Dollar.
Australian Dollar Supported by RBA's Hawkish Stance and China's Stimulus Measures
As we mentioned above the Australian dollar gained traction after the hawkish stance by the Reserve Bank of Australia (RBA) regarding interest rates.
The RBA has held its cash rate steady at 4.35% for the seventh consecutive meeting, emphasizing the need for a restrictive policy to keep inflation in check.
Meanwhile, China’s recent stimulus measures have improved demand from Australia’s largest trading partner, driving up commodity prices and bolstering the Australian Dollar.
However, there are mixed signals emerging from China’s manufacturing sector. The Caixin Manufacturing Purchasing Managers' Index (PMI) fell to 49.3 in September, signaling contraction, while the NBS Manufacturing PMI showed improvement at 49.8, surpassing expectations.
During his recent visit to China, Australian Treasurer Jim Chalmers addressed the country’s economic slowdown, expressing optimism about the new stimulus measures as a positive step forward.
China plans to inject over CNY 1 trillion into its largest state banks to tackle issues like shrinking profit margins and rising bad loans, marking the first major capital infusion since the 2008 financial crisis.
Meanwhile, the RBA reported that Australia’s domestic financial system remains resilient, although concerns linger about stress in China’s financial sector and a small but growing number of Australian borrowers struggling with mortgage payments.
Therefore, the hawkish stance of the RBA and China's stimulus measures support the Australian Dollar, strengthening the AUD/USD pair. However, mixed manufacturing data from China and concerns about domestic borrower defaults may limit significant gains for the AUD.
Impact of Federal Reserve's Rate Cut Stance on AUD/USD Pair
On the US front, recent comments from Federal Reserve Chairman Jerome Powell indicate that the central bank is not in a hurry to implement aggressive rate cuts. He emphasized that any reductions to the benchmark rate will be made gradually over time, reassuring markets that the recent half-point cut should not be interpreted as a signal for more drastic actions in the future.
Current market expectations, reflected in the CME FedWatch Tool, show a 61.8% chance of a 25 basis point rate cut in November. Meanwhile, the likelihood of a larger 50 basis point cut has fallen to 38.2%. This cautious approach underscores the Fed's commitment to carefully navigating the economic landscape, ensuring that any adjustments align with broader economic conditions.
Additionally, St. Louis Federal Reserve President Alberto Musalem emphasized that the Fed should consider implementing gradual interest rate cuts after the significant half-point reduction in September. He acknowledged the possibility of economic weakness and suggested that a quicker pace of cuts might be necessary if conditions deteriorate.
On the data front, the US Core Personal Consumption Expenditures (PCE) Price Index rose by just 0.1% month-over-month in August, falling short of the expected 0.2% increase. This softer inflation reading aligns with the Fed's outlook of easing inflation in the US and reinforces the idea that a more aggressive rate-cutting cycle could be on the horizon.
Therefore, the cautious approach of the Federal Reserve regarding rate cuts, combined with lower-than-expected inflation data, may bolster the US Dollar. This could limit the upward potential of the AUD/USD pair, as the Australian Dollar faces pressure from a stronger USD.
AUD/USD - Technical Analysis
The Australian dollar (AUD) continues to edge higher against the U.S. dollar (USD), maintaining a cautious upward trajectory. As of the latest trading session, the AUD/USD pair is trading at $0.69223, marking a slight 0.15% increase.
This recent climb positions the pair above its pivot point at $0.69069, suggesting a potential for further gains if key resistance levels are breached.
Immediate resistance is observed at $0.69403, followed by additional hurdles at $0.69622 and $0.69823. The 50-day Exponential Moving Average (EMA) is currently situated at $0.69140, serving as a critical support area that underpins the current bullish bias.
A sustained hold above this level could reinforce the bullish outlook, encouraging further buying interest.
The Relative Strength Index (RSI) reads 48, signaling neutral momentum with a slight inclination towards the upside. This neutral reading suggests that the market is not yet overbought or oversold, offering room for additional price movement in either direction.
On the downside, immediate support is identified at $0.68886. Should the price break below this level, it could trigger a deeper correction towards $0.68696 and $0.68478, where buyers might step in.
Given the technical setup, a potential buy entry above $0.69069 appears favorable, targeting $0.69406 while maintaining a stop-loss just below immediate support at $0.68886.
The AUD/USD’s recent resilience hints at a measured bullish sentiment, provided it remains above the 50-EMA.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD faces strong resistance at $0.6860, coinciding with the 50-EMA.
- Immediate support rests at $0.6819, with downside targets at $0.6783.
- RSI at 46 suggests neutral momentum, with potential for near-term recovery.
The Australian Dollar (AUD/USD) has gained 0.32% on the day, trading around $0.68417, reflecting some positive momentum in an otherwise cautious market. The pair is currently moving below the pivot point at $0.6860, with the 50-day Exponential Moving Average (EMA) also aligned at this level, acting as a significant technical barrier.
Immediate resistance stands at $0.6907, which, if breached, could open the door for further gains towards $0.6946 and $0.6983, respectively.
On the downside, immediate support lies at $0.6819, with additional supports at $0.6783 and $0.6744. Traders are carefully monitoring the $0.6860 level, as it serves as both a pivot point and a key resistance zone.
A break above this level would likely invalidate the current bearish setup. The Relative Strength Index (RSI) is currently at 46, signaling neutral momentum with a slight tilt towards oversold conditions, which suggests the possibility of a rebound in the near term.
For traders, a sell limit entry at $0.6860 is advised, with a take-profit target at $0.68189, supported by the immediate downside levels. A stop-loss at $0.68879 would help mitigate risk in case of an upward breakout. Overall, the AUD/USD pair remains vulnerable to downside pressure as long as prices stay below the 50-EMA.
AUD/USD - Trade Ideas
Entry Price – Sell Limit 0.68600
Take Profit – 0.68189
Stop Loss – 0.68879
Risk to Reward – 1: 1.4
Profit & Loss Per Standard Lot = +$411/ -$279
Profit & Loss Per Mini Lot = +$41/ -$279
AUD/USD Price Analysis – Sep 26, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair halted its downward trend and turned bullish around the 0.6882 level, reaching an intra-day high of 0.6887.
This rebound is largely fueled by contrasting monetary policy outlooks from the Reserve Bank of Australia (RBA) and the Federal Reserve.
Moreover, the Australian Dollar received a notable boost after China, its largest trading partner, announced new stimulus measures aimed at reviving its economy.
Moreover, the RBA's decision to keep the Official Cash Rate steady at 4.35% provided further support for the AUD.
On the other hand, the Federal Open Market Committee (FOMC) recently cut the federal funds rate, which has heightened market expectations for more cuts before the year ends.
This divergence in policy direction has created a favorable environment for the Australian Dollar.
Potential Impacts of China's Stimulus on AUD/USD Pair Amid Domestic Challenges
China is set to inject over CNY 1 trillion into its largest state banks, which are struggling with shrinking margins, declining profits, and rising bad loans. This move marks the first major capital boost since the 2008 global financial crisis.
Meanwhile, the Reserve Bank of Australia's September 2024 Financial Stability Review indicates that the Australian financial system remains resilient, although concerns persist about stress in China’s financial sector and its limited responses to these challenges.
In Australia, a small but growing number of home borrowers are falling behind on payments, with about 2% of owner-occupier borrowers facing serious default risks.
In addition, Australian Treasurer Jim Chalmers plans to visit China this week to strengthen economic ties, highlighting the need to engage with key Chinese officials due to Australia’s vulnerability to the Chinese economy.
JP Morgan recently advised investors to keep an eye on commodities and bond yields, as China's stimulus measures could enhance global growth and reduce recession risks. However, they also warned about the potential for reinflation.
In Australia, the Monthly Consumer Price Index rose by 2.7% year-over-year in August, down from 3.5%, indicating shifting economic conditions.
Therefore, the news of China’s capital injection and stimulus measures could strengthen the AUD/USD pair, as improved economic prospects in China may boost demand for Australian exports. However, concerns over rising default risks in Australia may limit AUD gains.
Impact of Federal Reserve Rate Cuts on AUD/USD Trends
On the US front, Federal Reserve Governor Adriana Kugler expressed strong support for the Fed's recent decision to cut interest rates by half a percentage point. She indicated that if inflation continues to decrease as expected, further rate cuts would be appropriate.
This significant cut lowered the federal funds rate to a range of 4.75% to 5.0%, marking the first rate reduction in over four years.
The market is now pricing in about a 50% chance of an additional 75 basis points cut by the end of the year, potentially bringing the rate down to between 4.0% and 4.25%.
Traders are particularly attentive to the upcoming release of the final US Gross Domestic Product (GDP) Annualized report for the second quarter (Q2), which is set to be announced later in the North American session.
This data will be crucial in shaping expectations about the US economy and could influence future decisions by the Federal Reserve regarding interest rates.
Therefore, the Federal Reserve's interest rate cut and potential for further reductions may weaken the US dollar, potentially boosting the AUD/USD pair. However, the upcoming GDP report could introduce volatility, influencing market sentiment and short-term trading strategies.
AUD/USD - Technical Analysis
The Australian Dollar (AUD/USD) has gained 0.32% on the day, trading around $0.68417, reflecting some positive momentum in an otherwise cautious market.
The pair is currently moving below the pivot point at $0.6860, with the 50-day Exponential Moving Average (EMA) also aligned at this level, acting as a significant technical barrier.
Immediate resistance stands at $0.6907, which, if breached, could open the door for further gains towards $0.6946 and $0.6983, respectively.
On the downside, immediate support lies at $0.6819, with additional supports at $0.6783 and $0.6744. Traders are carefully monitoring the $0.6860 level, as it serves as both a pivot point and a key resistance zone.
A break above this level would likely invalidate the current bearish setup. The Relative Strength Index (RSI) is currently at 46, signaling neutral momentum with a slight tilt towards oversold conditions, which suggests the possibility of a rebound in the near term.
For traders, a sell limit entry at $0.6860 is advised, with a take-profit target at $0.68189, supported by the immediate downside levels. A stop-loss at $0.68879 would help mitigate risk in case of an upward breakout.
Overall, the AUD/USD pair remains vulnerable to downside pressure as long as prices stay below the 50-EMA.
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AUD/USD Price Analysis – Sep 24, 2024
Daily Price Outlook
During the European trading session on Tuesday, the AUD/USD currency pair maintained its upward momentum, remaining well bid around the 0.6850 level and reaching an intra-day high of 0.6870.
The pair's upward movement was supported by upbeat market sentiment, which generally benefits risk-sensitive currencies like the Australian dollar.
Furthermore, a bearish US dollar, pressured by expectations of more aggressive policy easing by the Federal Reserve, provided further support for the AUD/USD pair.
Furthermore, China's announcement of a broad range of stimulus measures to boost its faltering economy also bolstered the Australian dollar.
RBA’s Steady Policy and China’s Stimulus Measures Boost AUD/USD Outlook
On the AUD front, the Australian central bank kept interest rates unchanged for the seventh consecutive meeting, as expected. The Reserve Bank of Australia (RBA) emphasized that monetary policy will remain restrictive until inflation shows clear signs of moving toward the target range.
RBA Governor Michele Bullock noted that recent data has not significantly changed the bank's policy outlook, reinforcing the central bank’s cautious stance.
Meanwhile, China's efforts to boost its slowing economy added support to the AUD/USD pair. On Tuesday, China announced a broad range of stimulus measures, including the People's Bank of China (PBOC) cutting the Reserve Requirement Ratio (RRR) by 50 basis points, which will release about 1 trillion yuan for new lending.
This move, combined with renewed US dollar weakness, has been a positive factor for the Australian dollar, as stronger economic ties with China benefit Australia's economy.
These factors are expected to act as a tailwind for the AUD/USD pair, supporting its upward momentum.
Weak US Dollar and Global Equity Strength Boost AUD/USD Prospects
On the US front, the US dollar has been losing momentum due to expectations that the Federal Reserve may adopt more aggressive policy easing. This outlook has weighed on the dollar's recovery from its year-to-date low.
Additionally, the strong performance of global equity markets has further reduced demand for the US dollar as a safe-haven asset.
These factors are helping to limit any potential losses for the AUD/USD pair and are likely to support further short-term gains.
As the US dollar remains weak, it provides a favorable environment for the Australian dollar to strengthen against it.
AUD/USD - Technical Analysis
The Australian dollar (AUD/USD) is currently trading at $0.68304, up 0.25%, as the pair shows a modest recovery during the Asian session. The price remains above its 50-day Exponential Moving Average (EMA) of $0.6811, indicating short-term bullish momentum.
Immediate resistance is seen at $0.6870, just above the pivot point of $0.6869. A break above this level could lead the pair toward the next resistance at $0.6902, and potentially extend to $0.6928 if momentum holds.
On the downside, immediate support is located at $0.6784, with further key levels at $0.6757 and $0.6725.
Technically, the RSI (Relative Strength Index) is positioned at 51, suggesting a neutral stance, with neither overbought nor oversold conditions.
This gives the market room to maneuver in either direction, depending on upcoming catalysts, such as U.S. and Australian economic data releases.
The pair’s trajectory remains cautiously bullish as long as it stays above the 50 EMA. However, the pivot point at $0.6869 will be crucial for further upside. If prices can break above immediate resistance, AUD/USD could see an extension toward the $0.6902 and $0.6928 resistance levels.
Conversely, a dip below $0.68084 could shift sentiment toward the downside, with targets near the $0.67798 stop-loss level.
Overall, AUD/USD looks poised for a potential rally above $0.68084, targeting $0.68693, while maintaining a stop-loss at $0.67798 to manage downside risk.
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