AUD/USD Price Forecast: Dips to 0.6495 Amid Economic Concerns and Fed’s Stance
The AUD/USD exchange rate has seen a downturn to 0.64945, reflecting a 0.61% decline. This move downwards is primarily driven by Australia’s underwhelming economic data coupled with the Federal Reserve’s cautious stance on rate adjustments.
Notably, Australian Consumer Inflation Expectations fell to 4.3% in March from 4.5%, and Retail Sales for February only saw a 0.3% increase, missing the anticipated 0.4% rise. Additionally, the Australian Monthly Consumer Price Index (CPI) for February reported a year-on-year increase of 3.4%, slightly below the expected 3.5%.
- Consumer Inflation Expectations and Retail Sales in Australia have not met expectations, hinting at possible rate cuts by the Reserve Bank of Australia. The CPI’s failure to hit the forecasted mark further dampens the economic outlook, applying downward pressure on the AUD/USD pair.
- The U.S. Federal Reserve, particularly through Governor Christopher Waller’s comments, exhibits a reluctance to lower rates hastily despite high inflation, favoring a stronger USD. Waller’s stance, suggesting a slow approach to rate cuts, contrasts sharply with the potential monetary easing in Australia, exacerbating the AUD/USD’s downward trend.
- Ongoing global tensions, notably the Russia-Ukraine conflict and Middle East unrest, have fostered a risk-off mood in markets, unfavorably affecting the risk-sensitive Australian dollar and contributing to the AUD/USD pair’s slump.
In light of these factors, the AUD/USD price forecast leans bearish in the immediate term. Market participants will keep a keen eye on upcoming Australian economic data and Federal Reserve policy directions, alongside global geopolitical news, to gauge potential shifts in the currency pair’s trajectory.
The interplay between contrasting monetary policies and external geopolitical events will crucially determine AUD/USD’s direction forward, with current numbers indicating a cautious market approach.
AUD/USD Price Forecast: Technical Outlook
The Relative Strength Index (RSI) at 34 suggests the pair is nearing oversold territory, hinting at possible buying interest ahead.
However, the recent breakout below the upward trendline and a bearish engulfing candle formation emphasize a dominant selling trend. This analysis points to a bearish stance for AUD/USD, with a possibility for reversal if it manages to climb above 0.6511.
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