The USD to AUD rate experienced a bullish turnaround in April after a period of decline and yesterday the upside became more convincing. This reversal coincided with some negative developments for the USD, such as weaker NFP numbers last week and lower PPI and CPI inflation this week, which pushed the price above the 200 daily SMA yesterday.

Last week, the exchange rate broke above several moving averages on the daily chart, which were positioned below the 0.66 level, but the 200 SMA (purple) was acting as resistance on the daily chart, as shown above. The stronger Australian dollar, driven by improved risk sentiment, further supported the pair’s upward movement, eventually pushing AUD/USD above the 200-day smooth moving average (SMA). This suggests a pick up in the bullish momentum in favor of the Australian dollar against the US dollar.

The Australian dollar saw a notable uptick of about 1% yesterday, as it surged around 70 cents, closing the day just below 0.67, influenced by a broad surge in risk appetite among investors coupled with a decline in the US dollar. After AUD/USD stabilized above 0.65 during May, yesterday movement which was driven primarily by weakness in the US dollar sent the price above the 200 SMA.

The momentum dynamics in the US Treasury market have shifted, and the path regarding the FOMC policy is currently unclear. This uncertainty is exacerbated by recent data releases from the US, including lower-than-expected CPI and PPI inflation figures earlier this week, as well as last week’s disappointing April Non-Farm Payrolls (NFP) report.

These developments suggest an increasing risk of weakness in the US job market, which could further impact the trajectory of US interest rates and consequently influence the performance of the AUD/USD pair. Last night we also had the employment report from Australia, with the Unemployment Rate expected to increase.

Australian April Employment Report

AUD/USD Live Chart

AUD/USD