AUD/USD Price Analysis – April 21, 2023
Daily Price Outlook
The AUD/USD pair is trading at 0.6742, up by 0.03% in 24 hours. A weaker US dollar strengthened the pair, while the Australian Dollar was among the best performers on Thursday, reaching its highest level in a week.
PBoC to Adopt an Adequate Monetary Policy
On Thursday, the People's Bank of China stated it expects a rise in consumer prices this year. Furthermore, the central bank does not anticipate that either inflation or deflation will pose serious risks to China.
The Chinese economy is on pace to rebound. Therefore, the PBoC issued a policy pause. It is important to remember that Australia is one of China's top trading partners, and the Australian Dollar will gain strength if China's economy recovers quickly.
As a result, the AUD/USD exchange rate changed to a positive trajectory since the PBoC is prepared to adopt sound monetary policy whenever necessary to sustain overall demand.
US Weak Economic Data
On Thursday, lower-than-expected results were released for the US Weekly Initial Jobless Claims, Philadelphia Fed Manufacturing Survey, and Existing Home Sales.
The US dollar suffered as the US data came in below expectations. DXY is now down 0.08% at 101.76. Meanwhile, US 10-year bond yields dropped to 3.526%.
Following the announcement of US economic statistics, a weaker US Dollar contributed to the initial rise of the AUD/USD pair.
Hawkish RBA
Governor of the Reserve Bank of Australia (RBA), Philip Lowe, expressed appreciation for the review's recommendations, which were mostly in line with expectations. It advocated for maintaining the inflation objective and called for eight monetary policy sessions per year. The 51 suggestions have broad support; some require parliamentary approval.
The hawkish tone of the RBA's April meeting minutes, published earlier this week, strengthens the AUD. The AUD/USD pair benefits from this, although several variables prevent bulls from making aggressive wagers and limit the upside potential.
Daily Technical Levels:
Support Resistance
0.6704 0.6779
0.6663 0.6813
0.6629 0.6854
Pivot Point: 0.6738
AUD/USD – Technical Outlook
The AUDUSD pair has settled below the previously breached support of the bullish channel visible on the chart, maintaining the bearish trend scenario. The initial target of this trend is to test the 0.6665 level, and surpassing this level would lead the price towards 0.6550 as the next negative milestone.
Thus, we will continue to recommend a bearish trend for the foreseeable future, taking into account that a breach of 0.6720 will prompt the price to test 0.6780 directly before determining the subsequent direction. The anticipated trading range for today lies between the 0.6640 support and 0.6750 resistance levels.
Related:
* NASDAQ Price Analysis – April 21, 2023
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