⚡Crypto Alert : Altcoins are up 28% in just last month! Unlock gains and start trading now - Click Here

AUD/USD Bears Strengthen as Australian Retail Sales Stall and US Debt Ceiling Negotiations Linger

The AUD/USD currency pair is showing increased bearish bias following the recent announcement of stagnant Retail Sales data for April by the Australian Bureau of Statistics. While experts anticipated a 0.2% growth, following a prior expansion of 0.4%, the static data suggests a downturn in household demand, likely reinforcing a neutral stance on interest rates by the Reserve Bank of Australia (RBA) for their upcoming June monetary policy meeting.

Last month’s surprising hike of interest rates by 25 basis points to 3.85% by RBA Governor Philip Low reflected the belief that the existing monetary policy wasn’t sufficiently constraining inflation.

Meanwhile, investor sentiment is further strained by continuous delays in US debt-ceiling negotiations, with S&P500 futures incurring losses in early Asia. Republican delegates have demonstrated resistance towards increased budget spending if it means raising the current US borrowing limit of $31.4 trillion.

The US Dollar Index (DXY) has continued its corrective course after signs of an overextended upside momentum. Encountering resistance above 104.31, the USD Index indicates a shift in investor focus towards the Federal Reserve’s (Fed) June policy meeting.

Boston Fed Bank President, Susan Collins, hinted at the potential cessation of interest rate increases, saying that the Fed “may be at or near” a pause, as reported by Reuters. Despite high inflation rates, Collins noted “some promising signs of moderation.”

On the technical front, the AUD/USD pair is edging towards testing the 0.6500 barrier, suggesting the likelihood of further decline towards our next target range of 0.6460 to 0.6400. The continuation of this bearish trend hinges on price stability below the 0.6550 level, backed by the negative pressure from the EMA50.

As of today, the expected trading range lies between 0.6440 support and 0.6550 resistance, maintaining a bearish outlook.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Avatar
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
Related Articles
🔒 OPEN A TRADING ACCOUNT