Technical Analysis

AUD/USD Price Analysis – May 12, 2023

By LonghornFX Technical Analysis
May 12, 20233 min

Daily Price Outlook

The AUD/USD pair remained relatively unchanged in Tokyo, hovering around the 0.6700 level after reaching its lowest point during the US session. Price increases in the US were slower than anticipated, with the Producer Price Index (PPI) data for April showing a monthly gain of 0.2% and an annual growth rate of 2.3% YoY.

Gasoline costs rose less rapidly than expected, while food prices declined. Core prices, excluding volatile components, increased by 3.4% YoY, indicating consistent price pressures in core services, as noted by analysts at ANZ Bank.

In other news, there was a notable rise in new unemployment claims in the US, and April witnessed a slight uptick in producer prices. US Weekly Initial Unemployment Claims exceeded forecasts, increasing by 22,000 to reach 264,000, signaling a weaker labor market. ANZ Bank analysts highlighted that the Western Australian budget for 2022-2023 anticipates AUD 4.2 billion, aligning with the forecast of the federal budget. However, this represents an AUD 1.8 billion increase compared to the previous projections.

The surplus is smaller due to additional costs associated with providing cost-of-living support and investing in frontline service delivery in sectors such as health, education, and disability services. The state treasury forecasts a smaller net working surplus of AUD 3.3 billion in 2023-24, which is AUD 1 billion lower than the mid-year update.

From a trading perspective, concerns regarding modest global economic indicators contributed to currency depreciation against the US dollar, driven by increased risk aversion. Friday's trading session may experience heightened volatility due to liquidity considerations. In Asia, the dollar's strength is expected to persist, although some retracements may occur given the day of the week.

Traders will also be attentive to monetary data announcements and speeches by members of the Federal Open Market Committee (FOMC) and the Bank of England's Monetary Policy Committee (MPC) Pill.

 AUD/USD Price Chart - Source: Tradingview

AUD/USD – Technical Outlook

The AUDUSD pair made an unsuccessful attempt to surpass the 0.6780 level and experienced a strong downward move, resuming its bearish correctional trend. Currently, it is approaching the 0.6665 level, and if this level is broken, it may further decline towards the 0.6550 region in the near term.

As a result, we anticipate the continuation of the bearish trend in the upcoming sessions. However, if the price manages to consolidate above the 0.6665 level despite the prevailing negative pressure, it could initiate new recovery attempts aiming to test the 0.6780 level once again.

For today's trading, we expect the price to move within a range of support at 0.6610 and resistance at 0.6730.

Happy trading!


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