AUD/USD Price Analysis: RBA Hawkish Stance Lifts AUD Amid U.S.-China Trade Risks

Posted on November 19, 2024 by Arslan Butt

The Australian Dollar (AUD) got a boost after the Reserve Bank of Australia’s (RBA) November meeting minutes.

The RBA left interest rates on hold at 4.35% and said current settings are already restrictive. RBA Governor Michele Bullock said they will keep this policy in place until inflation forecasts meet targets.

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AUD/USD Drops Below 0.6480 Amid Weak Aussie Jobs Data and Strong USD

Posted on November 14, 2024 by Arslan Butt

The AUD/USD pair has been under persistent pressure, trading near 0.6475 and touching an intraday low of 0.6460.

This downward movement is largely driven by Australia’s weaker-than-expected employment growth and a slight decline in the participation rate. The October employment report showed only a 15.9K increase in jobs, a steep drop from the 61.3K surge in September, with the participation rate dipping to 67.1%. Although full-time positions rose by 9.7K, the overall pace of job growth is slowing, raising concerns about Australia’s economic resilience.

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Australian dollar still tracing downwards after the US Q2 GDP report

Posted on July 28, 2023July 28, 2023 by Richardmadrian@gmail.com

If the [[AUD/USD]] exchange rate manages to surpass this key hurdle, it could signal a shift in the outlook from sideways to a more bullish trend in the longer term.

The Australian Dollar (AUD) faced significant downward pressure against the US Dollar (USD) on Friday, primarily driven by a series of factors. Firstly, the release of better-than-expected US GDP data for the second quarter on Thursday has bolstered the strength of the US Dollar. This positive economic data likely indicates a robust economic recovery in the US, which can lead to increased investor confidence in the USD and capital flows towards the US economy.

Secondly, the Federal Reserve’s preferred inflation gauge, Personal Consumption Expenditure (PCE), unexpectedly rose on a month-on-month basis. This increase in inflation indicates potential concerns about rising prices and may prompt the Federal Reserve to consider tightening its monetary policy to control inflation. As a result, investors may shift their investments towards the USD in anticipation of higher interest rates, making the Australian Dollar less attractive in comparison.

On the other hand, the Australian Dollar has been cascading down against the USD, breaking through all major daily Simple Moving Averages (SMA). SMA is a widely used technical indicator, and a breach below these averages suggests a bearish sentiment and a potential continuation of the downtrend.

The latest Core PCE data shows that prices gained 0.2% on a month-on-month (MoM) basis, which aligns with market expectations. This indicates a stable inflation rate in the US and suggests that the Federal Reserve’s efforts to control inflation may be yielding some results.

However, on a year-on-year (YoY) basis, Core PCE increased by 4.1%, which is slightly lower than the market’s expectations of 4.2% and a decrease from the previous month’s 4.6%. While the YoY figure is still elevated, the moderation in the rate of price increases might be perceived positively by the markets as it could alleviate some concerns about runaway inflation.

Given these inflation figures, it’s essential to consider the implications for monetary policy. The Federal Reserve closely monitors inflation data to determine its policy decisions. With Core PCE showing a relatively stable MoM increase and a slightly lower YoY figure, the Federal Reserve may adopt a more cautious approach to raising interest rates, which could lead to a stabilization of the US Dollar.

On the long-term chart, a crucial resistance level is identified at 0.7158, which corresponds to the high recorded in February. If the [[AUD/USD]] exchange rate manages to surpass this key hurdle, it could signal a shift in the outlook from sideways to a more bullish trend in the longer term. Traders and investors would closely monitor the price action around this level, as a decisive break above it may lead to a potential uptrend in the future.

On the other hand, the 0.6458 level, established in June, acts as a significant support level for bears (sellers). If the [[AUD/USD]] exchange rate breaches this level decisively, it may indicate a more bearish sentiment from a longer-term perspective. In such a scenario, traders and investors might anticipate a potential downtrend or further weakening of the Australian Dollar against the US Dollar.

[[AUD/USD]] daily analysis chart

AUD/USD Technical Analysis: Australian Dollar Gains Momentum Amidst Chinese Support and Positive Earnings

Posted on July 25, 2023 by Richardmadrian@gmail.com

AUD/USD currency pair technical breakdown

The [[AUD/USD]] currency pair has been undergoing interesting shifts in the forex market, influenced by a combination of macroeconomic factors, positive corporate earnings, and technical indicators. Chinese leaders offering support to the Australian economy, coupled with/U favourable earnings reports from GM, GE, and 3M, have sparked renewed interest in the Australian Dollar. In this technical analysis, we will explore how these developments, along with other key indicators, impact the [[AUD/USD]] exchange rate.

Market Support and Positive Earnings Propel [[AUD/USD]] Reversal

Amidst concerns about the weakening Australian economy, a lifeline was extended by Chinese leaders, effectively supporting the Australian Dollar. This gesture triggered a reversal against the USD, as the AUD/USD exchange rate surged. Furthermore, the impressive Q2 earnings reported by global giants GM, GE, and 3M instilled investor confidence, leading to increased demand for the Australian Dollar as a risk-on commodity currency.

Inflation Figures and Interest Rate Projections

Market participants are eagerly anticipating the release of Australia’s quarterly inflation figures on July 26. These figures are expected to play a crucial role in shaping traders’ projections of future interest rate movements in the country. Positive inflation data may reinforce the support for the Australian Dollar, as investors adjust their expectations regarding monetary policy.

Technical Indicators and Sentiment Analysis

AUD/USD currency pair ” width=”1154″ height=”702″ />

The current [[AUD/USD]] currency pair trading at 0.67676 indicates a market in flux, with recent price fluctuations reflecting heightened volatility. The 2-week high at 0.6896 marks a significant level of resistance, while the 2-week price low/floor at 0.67137 serves as an essential support level. Trading below the 200-exponential moving average at 0.67508 suggests short-term weakness in the Australian Dollar.

A closer look at the technical indicators reveals a mixed sentiment. The number of buy signals outweighs the sell signals, with oscillators leaning towards a neutral outlook. The overall bullish sentiment is supported by a sideways trend on both long and medium-term charts. However, a decisive breach of the key level at 0.6458, established in June, could shift the sentiment in favour of bears.

AUD/USD currency pair Potential for Bullish Bias

The weekly chart’s key hurdle at 0.7158, established in February 2023, holds immense significance for traders. A successful vault over this level may alter the outlook to one that is more bullishly biased. In such a scenario, the Australian Dollar could gain momentum, extending its upward trajectory against the USD.

Conclusion

The [[AUD/USD]] technical analysis reveals a complex and dynamic market influenced by a confluence of factors. Chinese support for the Australian economy, positive corporate earnings, and inflation data are driving short-term fluctuations. The technical indicators and sentiment analysis indicate an overall bullish bias, with the potential for a sustained rally if the key resistance at 0.7158 is surpassed. Traders should closely monitor the upcoming inflation figures to gauge the impact on interest rate expectations and the Australian Dollar’s performance. The AUD/USD currency pair promises to offer exciting trading opportunities in the coming days as the market navigates through these significant developments.