AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate Resistance at $0.6870, with further resistance at $0.6902 and $0.6928.
- Immediate Support at $0.6784, with next levels at $0.6757 and $0.6725.
- RSI stands at 51, indicating neutral market conditions with room for directional shifts.
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.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.68084
Take Profit – 0.68693
Stop Loss – 0.67798
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$609/ -$286
Profit & Loss Per Mini Lot = +$60/ -$28
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD remains bullish above $0.6809, with key resistance at $0.6868 and $0.6888.
- 50-day EMA at $0.6749 provides strong support for the ongoing uptrend.
- RSI at 66 indicates approaching overbought territory, but momentum remains positive for now.
The AUD/USD pair is trading at $0.6872, up 0.83%, signaling bullish momentum as it moves above key technical levels. Immediate resistance lies at $0.6845, with further resistance targets at $0.6868 and $0.6888. On the downside, immediate support is found at $0.6784, followed by deeper supports at $0.6750 and $0.6725.
The 50-day Exponential Moving Average (EMA) at $0.6749 is providing solid support, indicating that the current upward trend remains intact. The Relative Strength Index (RSI) sits at 66, suggesting the market is nearing overbought conditions, but still leaves room for further gains.
A break above $0.6868 would confirm the bullish trend, targeting the next resistance at $0.6888. However, if the pair falls below $0.6784, it could trigger a shift toward a more bearish outlook, testing the $0.6750 support level.
With China being a key trading partner for Australia, any news regarding China's economic performance or trade relations will likely influence the next move for AUD/USD. Additionally, the U.S. dollar’s performance following the Federal Reserve’s recent interest rate decisions will play a critical role in the pair’s trajectory.
In summary, AUD/USD shows strong bullish signals but faces immediate resistance. Traders should watch for a breakout above $0.6868 to confirm further upward momentum.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.68086
Take Profit – 0.68511
Stop Loss – 0.67830
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$425/ -$256
Profit & Loss Per Mini Lot = +$42/ -$25
AUD/USD Price Analysis – Sep 19, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair maintained its upward trend and remained well-bid around the $0.6832 level, hitting an intra-day high of $0.6840. This upward movement can be attributed to the higher-than-expected increase in new jobs created in August.
Meanwhile, the bearish US dollar, driven by the Federal Reserve’s (Fed) 50 basis point (bps) interest rate cut, was another key factor that kept the AUD/USD pair higher.
Moving ahead, the People’s Bank of China’s (PBoC) Monetary Policy Committee (MPC) is scheduled to hold its quarterly meeting on Friday to review its loan prime rate (LPR).
RBA's Stance and Strong Employment Data Support AUD/USD, but Inflation Remains a Concern
On the AUD front, the Reserve Bank of Australia (RBA) Governor Michele Bullock stated that it is too early to consider rate cuts due to ongoing high inflation.
RBA Assistant Governor Sarah Hunter added that, although the labor market remains tight, wage growth seems to have peaked and may slow down.
In August, Australia’s unemployment rate stayed at 4.2%, as expected, while the number of unemployed people fell by 10,000, bringing the total to 627,000.
Employment increased by 47,500 jobs, which exceeded the forecast of 25,000, but was lower than July’s 58,200.
The Australian Bureau of Statistics (ABS) noted that full-time employment dipped by 3,100, while part-time employment rose by 50,600.
The participation rate held steady at a record 67.1%, and the employment-to-population ratio slightly improved to 64.3%, just shy of its November 2023 peak.
Although unemployment figures fell slightly in August, the number of unemployed people has grown by 45,000 since the end of 2023. Overall, Australia's labor market continues to show resilience despite some fluctuations.
This news could provide short-term support for AUD/USD, as stronger-than-expected employment data and stable unemployment may boost confidence in the Australian economy. However, ongoing high inflation and wage growth concerns may limit the currency's long-term gains.
Impact of the Federal Reserve Rate Cut and US Economic Data on the AUD/USD Pair
On the US front, the broad-based US dollar lost its strength after the Federal Reserve unexpectedly cut interest rates by 50 basis points, instead of the expected 25. The Fed lowered its benchmark rate to a range of 4.75%–5% and signaled another half-point cut by year-end.
According to updated forecasts, rates are expected to drop further to 3.4% in 2025 and 2.9% in 2026, down from earlier projections of 4.1% and 3.1%.
The Fed also indicated that inflation won't hit its 2% target before 2026, raising doubts about future rate cuts. Despite this, Fed Chair Jerome Powell reassured that there is no immediate recession risk, pointing to a strong labor market and cooling inflation.
In other economic data, US Retail Sales rose by 0.1% month-over-month in August, following a stronger 1.1% rise in July, which beat expectations of a 0.2% decline.
This suggests consumer spending remains resilient. The Retail Sales Control Group increased by 0.3%, slightly below the previous month’s 0.4%.
Meanwhile, the University of Michigan’s Consumer Sentiment Index rose to 69.0 in September, higher than expected, reflecting an improving outlook on the US economy after months of uncertainty.
Therefore, the unexpected rate cut by the Federal Reserve could actually support the AUD/USD pair, as a weaker US dollar generally boosts other currencies like the Australian dollar.
However, the positive US retail data and improved consumer sentiment might prevent significant gains for AUD/USD.
AUD/USD - Technical Analysis
The AUD/USD pair is trading at $0.6872, up 0.83%, signaling bullish momentum as it moves above key technical levels. Immediate resistance lies at $0.6845, with further resistance targets at $0.6868 and $0.6888.
On the downside, immediate support is found at $0.6784, followed by deeper supports at $0.6750 and $0.6725.
The 50-day Exponential Moving Average (EMA) at $0.6749 is providing solid support, indicating that the current upward trend remains intact.
The Relative Strength Index (RSI) sits at 66, suggesting the market is nearing overbought conditions, but still leaves room for further gains.
A break above $0.6868 would confirm the bullish trend, targeting the next resistance at $0.6888. However, if the pair falls below $0.6784, it could trigger a shift toward a more bearish outlook, testing the $0.6750 support level.
With China being a key trading partner for Australia, any news regarding China's economic performance or trade relations will likely influence the next move for AUD/USD.
Additionally, the U.S. dollar’s performance following the Federal Reserve’s recent interest rate decisions will play a critical role in the pair’s trajectory.
In summary, AUD/USD shows strong bullish signals but faces immediate resistance. Traders should watch for a breakout above $0.6868 to confirm further upward momentum.
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AUD/USD Price Analysis – Sep 17, 2024
Daily Price Outlook
The AUD/USD pair extended its gains for the second consecutive day on Tuesday, reaching a one-and-a-half-week high of around 0.6758 during the European session. This marks the fourth straight day of positive movement for the pair. Investors are now focusing on the Federal Open Market Committee (FOMC) meeting scheduled for Wednesday to gauge future direction.
Meanwhile, the US dollar has been consolidating its recent losses, falling to its lowest level since July 2023, partly due to speculation of a substantial 50 basis point rate cut by the Federal Reserve.
Concurrently, the Reserve Bank of Australia's (RBA) hawkish stance and a generally positive sentiment in equity markets are bolstering the Australian dollar. These factors are supporting the AUD/USD pair, showcasing the Aussie’s strength amidst evolving market conditions.
Impact of US Dollar Weakness and Chinese Economic Concerns on AUD/USD Pair
On the US front, the Dollar has been struggling, remaining near its yearly low and contributing to caution among traders. The Federal Reserve’s anticipated significant rate cut has influenced this weakness. According to the CME Group’s FedWatch Tool, there's now over a 60% chance that the Fed will cut rates by 50 basis points on Wednesday.
This expectation has pushed the yield on 2-year US government bonds to its lowest level since September 2022, while the 10-year Treasury yield has weakened to levels not seen since June 2023.
Despite stronger-than-expected data from the New York Empire State Manufacturing Index for September, the Dollar has struggled to gain support. Additionally, weak economic reports from China over the weekend point to ongoing challenges in reaching its 5% GDP growth target for 2024.
This economic uncertainty affects the Australian Dollar, which is sensitive to China’s economic performance. Traders are cautious, waiting for the Fed’s decision on Wednesday and further guidance on future rate cuts, which will be crucial in shaping market expectations.
The uncertainty surrounding the US Dollar and weaker economic reports from China contribute to caution in the AUD/USD pair. Traders are closely watching the Fed's decision on rate cuts, which could influence the pair’s direction based on shifting expectations.
AUD/USD - Technical Analysis
The Australian dollar (AUD/USD) is trading at $0.67478, down 0.13% for the day, as the pair continues to consolidate just above its pivot point of $0.6734.
The 4-hour chart shows a steady upward trend, although the pair has recently encountered minor selling pressure. The immediate resistance at $0.6767 is the key level for bulls to watch.
A break above this could open the door to further upside, with the next resistance levels at $0.6793 and $0.6816, where buyers may face greater opposition.
On the downside, immediate support sits at $0.6698, where the 50-day EMA aligns, providing a solid floor for the pair. If prices break below this level, the next support levels lie at $0.6667 and $0.6635, suggesting potential for a deeper pullback.
The RSI is currently at 64, indicating mild bullish momentum, but edging closer to overbought territory. This suggests that while the trend remains positive, there may be a short-term pause before the next significant move.
A break above $0.67336 offers a potential buying opportunity, with targets around $0.67832. Traders should maintain a stop loss near $0.66962 to manage risk in case of a reversal.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate resistance stands at $0.6767, with further targets at $0.6793 and $0.6816.
- RSI at 64 suggests bullish momentum but warns of near-term overbought conditions.
- Buy above $0.67336, targeting $0.67832 with a stop loss at $0.66962 to limit downside risk.
The Australian dollar (AUD/USD) is trading at $0.67478, down 0.13% for the day, as the pair continues to consolidate just above its pivot point of $0.6734.
The 4-hour chart shows a steady upward trend, although the pair has recently encountered minor selling pressure. The immediate resistance at $0.6767 is the key level for bulls to watch.
A break above this could open the door to further upside, with the next resistance levels at $0.6793 and $0.6816, where buyers may face greater opposition.
On the downside, immediate support sits at $0.6698, where the 50-day EMA aligns, providing a solid floor for the pair. If prices break below this level, the next support levels lie at $0.6667 and $0.6635, suggesting potential for a deeper pullback.
The RSI is currently at 64, indicating mild bullish momentum, but edging closer to overbought territory. This suggests that while the trend remains positive, there may be a short-term pause before the next significant move.
A break above $0.67336 offers a potential buying opportunity, with targets around $0.67832. Traders should maintain a stop loss near $0.66962 to manage risk in case of a reversal.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.67336
Take Profit – 0.67832
Stop Loss – 0.66962
Risk to Reward – 1: 3
Profit & Loss Per Standard Lot = +$496/ -$374
Profit & Loss Per Mini Lot = +$49/ -$37
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate resistance at $0.6720 is crucial; a break above could accelerate gains toward $0.6751.
- Support at $0.6635 is pivotal; a breach could trigger further downside pressure.
- The pair remains buoyed by the 50-day EMA at $0.6672, a key technical level that supports the current uptrend.
AUD/USD is trading at $0.66907, up by 0.25%, reflecting a moderate recovery as the pair attempts to gain traction within a largely subdued environment.
The currency pair is hovering above its 50-day Exponential Moving Average (EMA) at $0.6672, a crucial technical level that has served as dynamic support.
This indicates that the bullish momentum could build further if the pair manages to break through immediate resistance levels.
Immediate resistance stands at $0.6720, aligning with the pivot point, which could be a key level for bullish traders.
A break above this resistance could lead AUD/USD toward $0.6751, followed by the next target at $0.6793, suggesting a broader upside potential. However, a failure to breach $0.6720 may limit gains and reinforce selling pressure.
On the downside, immediate support is located at $0.6635, and a move below this could push the pair toward $0.6610 and further down to $0.6580.
The RSI at 60 suggests a mild bullish bias, but it's not yet in overbought territory, signaling there’s room for upward movement.
Traders should be mindful of these key levels. A sustained move above the $0.6720 pivot point is critical for extending the bullish trajectory, while a fall below $0.6635 could signal a deeper correction.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.66718
Take Profit – 0.67198
Stop Loss – 0.66344
Risk to Reward – 1: 1.2
Profit & Loss Per Standard Lot = +$480/ -$374
Profit & Loss Per Mini Lot = +$48/ -$37
AUD/USD Price Analysis – Sep 12, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair managed to halt its downward trend and regain some of its gains around the 0.6676 level, reaching an intra-day high of 0.6695.
These gains occurred despite the US dollar gaining momentum amid decreasing odds for a significant Fed rate cut.
The upward trend in the AUD/USD can be attributed to the risk-on market sentiment, which generally supports the Australian dollar and contributes to its gains.
On the other hand, news that China might cut interest rates on $5 trillion in mortgages to boost consumption has raised concerns about a slowdown in its economy.
This, combined with a slight strengthening of the US Dollar (USD), has led to a sharp decline in the Australian Dollar (AUD).
China's Potential Rate Cuts and USD Strength Impacting AUD
On the AUD front, reports suggest that China might cut interest rates on $5 trillion in mortgages this month to boost consumer spending. This has raised concerns about a slowdown in China's economy, which is the world's second-largest.
These worries have negatively impacted currencies from countries closely linked to China, such as the Australian Dollar (AUD).
Meanwhile, a slight strengthening of the US Dollar (USD) has contributed to the sharp drop in the AUD. The combination of fears about China's economic slowdown and the stronger USD has led to a significant decline in the AUD during the trading session.
Impact of US CPI Report and Fed Rate Cut Expectations on AUD/USD
On the US front, the latest Consumer Price Index (CPI) report showed that overall consumer prices are easing. However, the core CPI data, which excludes volatile items like food and energy, indicates that underlying inflation remains stubbornly high.
This has reduced expectations for a significant rate cut by the Federal Reserve (Fed) at their next meeting. As a result, US Treasury bond yields have risen, pushing the US Dollar closer to its monthly peak.
Despite this, investors believe that the Fed will start easing its policy and cut interest rates by 25 basis points at each of the remaining three meetings in 2024.
This belief, coupled with a positive market mood, has limited further gains for the US Dollar and provided some support for the Australian Dollar (AUD).
Traders are now waiting for the US Producer Price Index (PPI) report to provide new direction for the market.
Therefore, the easing US CPI and persistent core inflation have bolstered US Treasury yields and strengthened the US Dollar, pushing the AUD/USD pair lower. However, expectations of future Fed rate cuts and positive market sentiment have provided some support to the AUD.
AUD/USD - Technical Analysis
AUD/USD is trading at $0.66907, up by 0.25%, reflecting a moderate recovery as the pair attempts to gain traction within a largely subdued environment.
The currency pair is hovering above its 50-day Exponential Moving Average (EMA) at $0.6672, a crucial technical level that has served as dynamic support. This indicates that the bullish momentum could build further if the pair manages to break through immediate resistance levels.
Immediate resistance stands at $0.6720, aligning with the pivot point, which could be a key level for bullish traders.
A break above this resistance could lead AUD/USD toward $0.6751, followed by the next target at $0.6793, suggesting a broader upside potential. However, a failure to breach $0.6720 may limit gains and reinforce selling pressure.
On the downside, immediate support is located at $0.6635, and a move below this could push the pair toward $0.6610 and further down to $0.6580.
The RSI at 60 suggests a mild bullish bias, but it's not yet in overbought territory, signaling there’s room for upward movement.
Traders should be mindful of these key levels. A sustained move above the $0.6720 pivot point is critical for extending the bullish trajectory, while a fall below $0.6635 could signal a deeper correction.
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AUD/USD Price Analysis – Sep 10, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair struggled to maintain its earlier gains and turned bearish around the 0.6655 level, hitting an intraday low of 0.6644.
This decline was primarily driven by a stronger US dollar, which gained momentum after recent labor data hinted at a reduced likelihood of a sharp Fed rate cut in September.
However, the pair managed to recover its intraday losses after the positive trade data from China. Looking ahead, the upcoming Consumer Price Index (CPI) report on Wednesday and the Producer Price Index (PPI) on Thursday will be crucial in shaping the Fed’s rate policy.
These reports could also influence gold prices, given its status as a non-interest-bearing asset.
Stronger US Dollar and Bearish AUD/USD Due to Fed Rate Cut Expectations and Mixed Labor Data
On the US front, the broad-based US dollar gained support as recent labor market data introduced uncertainty about a potential aggressive rate cut by the Federal Reserve (Fed) in September.
According to the CME FedWatch Tool, the market expects at least a 25 basis point rate cut by the Fed, but the chance of a larger 50 basis point cut has slightly decreased to 29.0%, down from 30.0% last week. This shift in expectations contributed to the bearish movement of the AUD/USD pair.
In recent US data, Nonfarm Payrolls (NFP) increased by 142,000 jobs in August, falling short of the 160,000 forecast but improving from July’s revised figure of 89,000.
The Unemployment Rate dropped to 4.2%, as expected, from 4.3% the previous month. Fed Bank of Chicago President Austan Goolsbee indicated that Fed officials are aligning with the market's sentiment about a potential policy rate adjustment.
FXStreet’s FedTracker rated Goolsbee’s comments as dovish, suggesting a lower likelihood of a drastic rate cut.
Therefore, the shift in expectations for a smaller Fed rate cut, combined with mixed US labor data, has led to a stronger US dollar and bearish movement in the AUD/USD pair. This is due to reduced rate cut speculation and improved US economic indicators.
AUD/USD Strengthens Amidst Chinese Trade Data and RBA Rate Cut Expectations
On the AUD front, the AUD/USD pair gained traction after China's Trade Balance data was released on Tuesday. RBC Capital Markets now anticipates the Reserve Bank of Australia (RBA) will cut rates in February 2025, earlier than previously forecasted for May 2025. Despite persistent inflation in Australia, the RBA doesn’t see the slower economic growth as a strong enough reason to lower rates this year.
Meanwhile, Australia's Westpac Consumer Confidence fell by 0.5% in September, reversing August’s 2.8% increase. Traders are closely watching China’s upcoming Trade Balance data due to the strong trade ties between Australia and China. Changes in China’s economic performance can significantly impact Australian markets.
China’s Consumer Price Index (CPI) rose by 0.6% year-on-year in August, a slight improvement from July but below expectations. Monthly CPI inflation increased by 0.4%, missing the forecast. China's Trade Balance showed a surplus of CNY 649.34 billion in August, up from the previous CNY 601.90 billion, with exports increasing by 8.4% year-on-year.
Therefore, the AUD/USD pair strengthened following China's Trade Balance data, while expectations of an earlier RBA rate cut in February 2025 and a drop in Australian consumer confidence influenced the pair. Positive Chinese trade data supported the AUD.
AUD/USD - Technical Analysis
The AUD/USD pair is currently trading at $0.66698, up 0.08% on the day, in a consolidative pattern following a minor bullish movement.
The immediate pivot point sits at $0.6701, which aligns with the 50-day Exponential Moving Average (EMA), acting as a key resistance level.
This suggests that the pair is trading near a crucial juncture, with potential for both upward and downward movement depending on market conditions.
On the upside, immediate resistance is at $0.6720, followed by $0.6751 and a more significant barrier at $0.6793. A break above $0.6720 could fuel further bullish momentum, targeting the higher resistance levels.
However, AUD/USD would need to overcome the key pivot point at $0.6701 to signal a shift toward a sustained upward trend.
On the downside, immediate support is seen at $0.6646, followed by more substantial support at $0.6610 and $0.6580. If the pair fails to maintain its position above $0.6646, bearish sentiment may deepen, with the next target likely at $0.6610.
The Relative Strength Index (RSI) is currently at 46, signaling neutral momentum with a slight bearish tilt, which could indicate limited upward potential unless fresh catalysts emerge.
For now, AUD/USD remains neutral to slightly bullish, with the $0.6701 pivot acting as a key battleground for both bulls and bears.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD faces resistance at $0.6701; breaking above this could lead to bullish momentum.
- Immediate support lies at $0.6646, with further downside risks toward $0.6610.
- RSI of 46 shows neutral momentum, but a close watch on key support levels is crucial.
The AUD/USD pair is currently trading at $0.66698, up 0.08% on the day, in a consolidative pattern following a minor bullish movement.
The immediate pivot point sits at $0.6701, which aligns with the 50-day Exponential Moving Average (EMA), acting as a key resistance level.
This suggests that the pair is trading near a crucial juncture, with potential for both upward and downward movement depending on market conditions.
On the upside, immediate resistance is at $0.6720, followed by $0.6751 and a more significant barrier at $0.6793.
A break above $0.6720 could fuel further bullish momentum, targeting the higher resistance levels. However, AUD/USD would need to overcome the key pivot point at $0.6701 to signal a shift toward a sustained upward trend.
On the downside, immediate support is seen at $0.6646, followed by more substantial support at $0.6610 and $0.6580.
If the pair fails to maintain its position above $0.6646, bearish sentiment may deepen, with the next target likely at $0.6610.
The Relative Strength Index (RSI) is currently at 46, signaling neutral momentum with a slight bearish tilt, which could indicate limited upward potential unless fresh catalysts emerge.
For now, AUD/USD remains neutral to slightly bullish, with the $0.6701 pivot acting as a key battleground for both bulls and bears.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.66454
Take Profit – 0.67014
Stop Loss – 0.66154
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$560/ -$300
Profit & Loss Per Mini Lot = +$56/ -$30
AUD/USD Price Analysis – Sep 03, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair extended its bearish trajectory, slipping to an intra-day low of 0.6730 and hovering around the 0.6732 level. This downward movement is primarily driven by a strengthening US dollar, bolstered by upbeat US economic data and rising Treasury yields. However, the dollar's gains may be tempered by growing market expectations of a 25 basis point rate cut by the Federal Reserve in September.
Besides this, the Australian dollar faces pressure from domestic economic indicators. The unexpected decline in Australia’s Private Capital Expenditure and lower-than-anticipated CPI figures are weighing on the AUD, contributing to its weakness against the USD.
Traders are now eyeing Australia's Q2 Gross Domestic Product (GDP) and July Trade Balance data, along with a forthcoming speech by Reserve Bank of Australia (RBA) Governor Michele Bullock, for further insights into the central bank's monetary policy outlook.
US Dollar Strengthens Amid Mixed Economic Data and Rate Cut Speculation, Pressuring AUD/USD
On the US front, the broad-based US dollar strengthened as Treasury yields continued to rise. However, its gains could be limited by growing expectations that the Federal Reserve might cut interest rates by 25 basis points in September.
Traders are now looking ahead to the upcoming US employment data, especially the August Nonfarm Payrolls (NFP), for more clues on the timing and extent of potential Fed rate cuts.
Recent US economic data highlights mixed signals. The US Bureau of Economic Analysis reported that the headline Personal Consumption Expenditures (PCE) Price Index rose by 2.5% year-over-year in July, slightly below the expected 2.6%.
The core PCE, excluding food and energy, also grew by 2.6%, just shy of the 2.7% forecast. Meanwhile, US Gross Domestic Product (GDP) grew at an annualized rate of 3.0% in the second quarter, surpassing expectations.
Initial Jobless Claims fell to 231,000 for the week ending August 23, indicating a slight improvement in the labor market. However, Federal Reserve Atlanta President Raphael Bostic suggested that it might be time to consider rate cuts due to cooling inflation and rising unemployment, with his comments being rated as neutral on the hawkish-dovish scale.
Consequently, the mixed US economic data and rising Treasury yields, along with speculation about a Fed rate cut, have contributed to the US dollar's strength, putting downward pressure on the AUD/USD pair as the Australian dollar struggles to maintain its value.
Mixed Australian Economic Data Creates Uncertainty for AUD/USD Pair
On the other hand, Australia’s Building Permits surged by 10.4% month-over-month in July, recovering strongly from a 6.5% decline in June and marking the highest growth since May 2023. On an annual basis, building permits grew by 14.3%, a notable rebound from the previous 3.7% decline, indicating a positive trend in the construction sector.
However, Australia's economic outlook is mixed. Private Capital Expenditure unexpectedly dropped by 2.2% in the second quarter, reversing from a 1.9% expansion in the previous period and missing market expectations for a 1.0% increase.
This decline marks the first contraction in new capital spending since the third quarter of 2023. Additionally, Australia’s Monthly Consumer Price Index (CPI) rose by 3.5% year-on-year in July, down slightly from June's 3.8% but slightly above the expected 3.4%. Despite the decrease, this is the lowest CPI figure since March, reflecting some easing in inflation.
Traders are now watching closely for Australia's Q2 Gross Domestic Product (GDP) and July Trade Balance data, along with an upcoming speech by Reserve Bank of Australia (RBA) Governor Michele Bullock, for further clues on the central bank's approach to monetary policy.
Therefore, the mixed economic data from Australia, including a rebound in building permits and declines in capital expenditure and CPI, may create uncertainty for the AUD/USD pair. Traders will be closely watching upcoming GDP and Trade Balance reports for clearer direction.
AUD/USD - Technical Analysis
The Australian Dollar (AUD/USD) is currently trading around $0.6742, showing signs of a bearish continuation following a recent breakdown. The pair is under pressure as it trades below the key support level of $0.6754, now acting as immediate resistance. The breakdown below this level has opened the door for further declines towards the next support levels.
The pivot point for today’s session is at $0.6754, which also marks the immediate resistance. Should the pair attempt a recovery, it may find resistance at $0.6770, with the next levels of resistance at $0.6784 and $0.6793. On the downside, immediate support lies at $0.6720, followed by $0.6699 and $0.6677.
Technical indicators are pointing towards continued bearish momentum. The Relative Strength Index (RSI) is currently at 33.73, indicating oversold conditions, which could suggest a potential short-term rebound before the downtrend resumes. The 50-day Exponential Moving Average (EMA) is positioned at $0.6784, reinforcing the resistance around this level.
Given the recent price action and the technical indicators, a sell position below $0.6754 could be considered, with a take profit target at $0.6720 and a stop loss set at $0.6770 to manage risk. The breakdown below key support levels suggests that the bears are in control, and the pair could see further declines if it remains below the $0.6754 pivot point.
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