AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD trading at $0.66072, down 0.10%
- Pivot point at $0.6647 with immediate resistance at the same level
- Entry price for buying above $0.66014, with take profit at $0.66469 and stop loss at $0.65713
The AUD/USD pair is trading at $0.66072, down 0.10% in the latest session. The 4-hour chart highlights a pivot point at $0.6647, which serves as a critical level for traders.
Immediate resistance is found at the pivot point, followed by subsequent resistance levels at $0.6691 and $0.6727. On the downside, immediate support is observed at $0.6559, with further support at $0.6517 and $0.6467.
The technical indicators provide additional context for the current market conditions. The Relative Strength Index (RSI) is at 53, indicating a slightly bullish sentiment but not yet in overbought territory.
The 50-day Exponential Moving Average (EMA) is positioned at $0.6596, acting as a dynamic support level slightly below the current price, which can provide a buffer against further declines.
Based on the technical setup, the strategy suggests an entry price for buying above $0.66014, with a take-profit target at $0.66469 and a stop loss at $0.65713.
This approach takes into account the potential for upward movement while managing risk effectively with the stop loss placed just below the recent support level.
A break above the pivot point at $0.6647 could indicate further bullish momentum, propelling prices towards the next resistance levels of $0.6691 and $0.6727. Conversely, if the price falls below immediate support at $0.6559, the next support levels at $0.6517 and $0.6467 will be crucial to watch for potential stabilization.
Overall, the outlook for AUD/USD remains cautiously optimistic above the entry price of $0.66014.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.66014
Take Profit – 0.66469
Stop Loss – 0.65713
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$455/ -$301
Profit & Loss Per Mini Lot = +$45/ -$30
AUD/USD Price Analysis – May 14, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair struggled to gain positive traction and remained around the 0.6610 level, reaching an intraday low of 0.6598. The downward trend could be attributed to several factors, including a strengthening US dollar and risk-off market sentiment.
Additionally, the RBA's less hawkish stance has contributed to undermining the AUD/USD pair. Furthermore, previously released weak business conditions and low confidence indicate a slowing economy, which has dampened investor optimism about Australia's economic outlook and further weakened the AUD/USD pair.
Impact of RBA Decision and Economic Factors on AUD/USD Pair
On the AUD front, the losses in the AUD/USD pair were further bolstered following the Reserve Bank of Australia's decision to maintain interest rates at 0.35% last week, which dampened expectations for a more aggressive monetary policy stance despite stronger inflation data.
On the data front, the National Australia Bank's Business Conditions index declined to 7 in April from the previous 9, while Business Confidence remained unchanged at 1. Australia's Treasury predicts that inflation will return to the RBA's target range by late 2024, consistent with earlier forecasts.
However, the Commonwealth Bank of Australia (CBA) adjusted its AUD forecast for the end of 2024 downwards to 0.69 due to factors such as the interest rate differential and the high yields on US Treasury bonds, which bolster the US Dollar.
Hence, the AUD/USD pair declined due to the RBA's neutral stance, steady rates, weak business conditions, and CBA's lowered AUD forecast, reflecting challenges against a stronger USD.
Impact of US Dollar Strength and Economic Indicators on AUD/USD Pair
On the US front, the US Dollar strengthened as Federal Reserve officials stressed the importance of maintaining higher interest rates due to ongoing worries about inflation. Fed Vice Chair Philip Jefferson's comments on Monday supported this stance, suggesting that rates should remain unchanged until signs of inflation moderating appear.
Investors are anticipating Tuesday's Producer Price Index (PPI) report, which is a significant economic gauge. If it indicates increased inflationary pressures, it could bolster the US Dollar. Additionally, a survey by the Federal Reserve Bank of New York revealed a rise in one-year inflation expectations to 3.3%, further highlighting concerns about inflation.
Neel Kashkari, President of the Minneapolis Federal Reserve, cautioned against tightening monetary policy too quickly, suggesting that despite certain thresholds being met, another rate hike is possible. Meanwhile, San Francisco Fed President Mary Daly emphasized the necessity of maintaining a prolonged restrictive policy to reach the Fed's inflation targets.
On the data front, the University of Michigan Consumer Sentiment Index fell to 67.4 in May, its lowest level in six months, below the expected 76 reading. Additionally, the UoM 5-year Consumer Inflation Expectation increased to 3.1%, reaching a six-month high compared to the previous 3.0%.
Therefore, the US Dollar's strength, supported by Fed officials' stance on interest rates and inflation concerns, coupled with weaker consumer sentiment data, may further pressure the AUD/USD pair amid heightened demand for the USD as a safer currency.
AUD/USD - Technical Analysis
The AUD/USD pair is trading at $0.66072, down 0.10% in the latest session. The 4-hour chart highlights a pivot point at $0.6647, which serves as a critical level for traders. Immediate resistance is found at the pivot point, followed by subsequent resistance levels at $0.6691 and $0.6727. On the downside, immediate support is observed at $0.6559, with further support at $0.6517 and $0.6467.
The technical indicators provide additional context for the current market conditions. The Relative Strength Index (RSI) is at 53, indicating a slightly bullish sentiment but not yet in overbought territory.
The 50-day Exponential Moving Average (EMA) is positioned at $0.6596, acting as a dynamic support level slightly below the current price, which can provide a buffer against further declines.
Based on the technical setup, the strategy suggests an entry price for buying above $0.66014, with a take-profit target at $0.66469 and a stop loss at $0.65713. This approach takes into account the potential for upward movement while managing risk effectively with the stop loss placed just below the recent support level.
A break above the pivot point at $0.6647 could indicate further bullish momentum, propelling prices towards the next resistance levels of $0.6691 and $0.6727.
Conversely, if the price falls below immediate support at $0.6559, the next support levels at $0.6517 and $0.6467 will be crucial to watch for potential stabilization.
Overall, the outlook for AUD/USD remains cautiously optimistic above the entry price of $0.66014.
Related News
- USD/CAD Price Analysis – May 14, 2024
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD trades slightly down at $0.65802, hovering near the 50 EMA support level at $0.6564.
- Resistance levels to watch are $0.6602, $0.6647, and $0.6691; support solidifies around $0.6467.
- Recommended trade: Buy above $0.65623, targeting $0.66121 with a stop loss at $0.65322 to mitigate risks.
The Australian Dollar (AUD/USD) is experiencing slight downward pressure today, trading at $0.65802, a decrease of 0.01%. The currency pair is currently navigating just above a critical 50-Day Exponential Moving Average (EMA) positioned at $0.6564. This level is noteworthy as it has recently served as a baseline for the pair’s support, suggesting that the AUD/USD could find stability and potentially rebound from these levels.
Looking at the technical framework, the pivot point is set at $0.6612. Immediate resistance lies slightly lower at $0.6602, which the pair needs to overcome to aim for higher resistance levels at $0.6647 and $0.6691. On the downside, the immediate support is significantly lower at $0.6504, indicating a potential area where buying interest might resurface. Additional supports are identified at $0.6467, which is notably listed twice, suggesting a strong support zone that could be critical in preventing further declines.
The Relative Strength Index (RSI) of 49 indicates a nearly balanced market dynamic, with neither overbought nor oversold conditions present, providing room for both upside and downside movements. Based on the current market setup and the proximity of the price to the 50 EMA, a cautious buying strategy could be considered. Entering a long position above $0.65623 with a target of $0.66121 and a stop loss at $0.65322 offers a structured approach to capitalize on potential upward movements while managing risk effectively.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.65623
Take Profit – 0.66121
Stop Loss – 0.65322
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$498/ -$301
Profit & Loss Per Mini Lot = +$49/ -$30
AUD/USD Price Analysis – May 09, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair continued its losing streak, remaining well-offered around the 0.6577 level and hitting an intra-day low of 0.6565. The losses were driven by the less hawkish stance of the RBA, which tended to undermine the Australian currency and contributed to the weakness of the AUD/USD pair. Additionally, previously released downbeat Australian Retail Sales data was seen as another key factor keeping the pair down.
Moreover, the risk-off market sentiment triggered by ongoing tensions in the Middle East played a major role in keeping the AUD/USD pair down by undermining the riskier Australian dollar. Conversely, the bullish US dollar, supported by the hawkish Fed stance regarding interest rates, put downward pressure on the AUD/USD pair.
RBA's Dovish Stance and Weaker Retail Sales Weigh on AUD/USD Pair
On the AUD front, the Reserve Bank of Australia (RBA) adopted a cautious approach, even though recent inflation data had exceeded expectations. The RBA kept the interest rate unchanged at 4.35%, taking a wait-and-see stance. Despite the increase in March's inflation rate, RBA Governor Michele Bullock remains cautious, noting the ongoing risks associated with inflation.
She believes that the current interest rates are appropriate to bring inflation back to the 2-3% target range by the second half of 2025. However, Societe Generale expressed concerns, anticipating a potential slowdown in Australian economic growth. They predict downside risks, citing the impact of RBA rate hikes on the economy.
On the data front, Australian Retail Sales fell by 0.4% in the first quarter of 2024, reversing the 0.4% growth seen in the previous quarter, indicating a decline in consumer spending. Meanwhile, the ASX 200 Index ended its five-day winning streak, largely due to a drop in bank stocks caused by regulatory issues. This decline was also influenced by a downturn in the U.S. markets, where investors were unsettled by mixed corporate earnings and the Federal Reserve's plans to maintain higher interest rates for a longer period. These factors contribute to a more cautious market environment in Australia.
Consequently, the RBA's cautious stance and concerns about economic growth, along with weaker retail sales data and market uncertainty, may put downward pressure on the AUD/USD pair, leading to a decline in its value.
Fed's Extended Higher Interest Rates Strengthen US Dollar, Weakening AUD/USD Pair
On the US front, the US Dollar has strengthened as the Federal Reserve (Fed) is expected to maintain higher interest rates for an extended period, pushing up US Treasury yields and supporting the US Dollar. This expectation is fueled by statements from influential Fed officials like Susan Collins from Boston, who said it could take longer to reduce inflation to the target of 2%. Similarly, New York's John Williams and Minneapolis's Neel Kashkari have noted that interest rates might remain elevated for an extended time.
Therefore, the US Dollar's strength due to the Fed's extended higher interest rates and rising US Treasury yields is likely to put downward pressure on the AUD/USD pair, leading to a weaker Australian dollar.
AUD/USD - Technical Analysis
The Australian Dollar (AUD/USD) is experiencing slight downward pressure today, trading at $0.65802, a decrease of 0.01%. The currency pair is currently navigating just above a critical 50-Day Exponential Moving Average (EMA) positioned at $0.6564. This level is noteworthy as it has recently served as a baseline for the pair’s support, suggesting that the AUD/USD could find stability and potentially rebound from these levels.
Looking at the technical framework, the pivot point is set at $0.6612. Immediate resistance lies slightly lower at $0.6602, which the pair needs to overcome to aim for higher resistance levels at $0.6647 and $0.6691. On the downside, the immediate support is significantly lower at $0.6504, indicating a potential area where buying interest might resurface. Additional supports are identified at $0.6467, which is notably listed twice, suggesting a strong support zone that could be critical in preventing further declines.
The Relative Strength Index (RSI) of 49 indicates a nearly balanced market dynamic, with neither overbought nor oversold conditions present, providing room for both upside and downside movements. Based on the current market setup and the proximity of the price to the 50 EMA, a cautious buying strategy could be considered. Entering a long position above $0.65623 with a target of $0.66121 and a stop loss at $0.65322 offers a structured approach to capitalize on potential upward movements while managing risk effectively.
Related News
- GOLD Price Analysis – May 09, 2024
AUD/USD Price Analysis – May 7, 2024
Daily Price Outlook
During the European trading sesion, the AUD/USD currency pair failed to maintain its upward rally and turned bearish around the 0.6602 level, hitting the intraday low of 0.6586.
However, the reason for its downward trend could be attributed to multiple factors, including the renewed strength of the US dollar, which gained traction due to the risk-off market sentiment, boosting safe-haven assets like the US dollar.
Meanwhile, the risk-off market sentiment, triggered by ongoing tensions in the Middle East, was seen as another key factor that undermined the riskier Australian dollar and contributed to the AUD/USD pair's losses.
In addition to this, the RBA's decision to keep rates unchanged, despite market expectations of a hawkish stance due to high inflation, weakened the Australian dollar and contributed to the AUD/USD pair's losses.
Australia's Monetary Policy and Economic Data Impact on AUD/USD
On the Australian front, the Reserve Bank of Australia (RBA) kept its interest rate steady at 4.35%, surprising many who expected a more hawkish stance after inflation data came in higher than anticipated. This was the fifth consecutive quarter of declining inflation, but the rise in the Consumer Price Index (CPI) in March surprised many people.
RBA Governor Michele Bullock highlighted the need to monitor inflation risks and outlined the bank's plan to bring inflation back to its 2-3% target by 2025. The Judo Bank Australia Composite PMI for April showed slower growth in the private sector, with manufacturing output falling while services grew.
Analysts at Commonwealth Bank and Westpac predict the RBA's rate to peak at 4.35% in November 2023 and then drop to 3.10% by December 2025.
On the data front, Australia's inflation rate (YoY), as measured by TD Securities and the University of Melbourne, decreased slightly to 3.7% in April from 3.8% the previous month, while the monthly inflation rate remained steady at 0.1%. In China, the Caixin Services Purchasing Managers' Index (PMI) for April dropped a bit to 52.5 from 52.7 in March.
Despite the slight dip, it still marks the 16th consecutive month of growth in China's services sector, which is significant for Australia's economy. As one of China's major exporters, Australia's market might benefit from continued expansion in Chinese services activity.
Therefore, the RBA's decision to keep interest rates steady, coupled with slower growth in Australia's private sector, has weakened the Australian dollar, putting downward pressure on the AUD/USD pair. However, strong Chinese service activity might offer some support due to Australia's trade ties with China.
US Dollar Index Weakness and Its Effect on the AUD/USD Pair
On the US front, the broad-based US dollar has reversed its losses despite softer US labor data being released on Friday. This has fueled speculation about potential interest rate cuts by the Federal Reserve in 2024.
Richmond Federal Reserve President Thomas Barkin commented that high interest rates could slow US economic growth and reduce inflation, bringing it closer to the Fed's 2% target.
He also mentioned that the strong labor market gives the Fed time to ensure inflation is trending down before cutting rates. However, he warned that continued inflation in the housing and services sectors could keep prices high.
Therefore, the renewed strength of the US dollar due to speculation about future Fed rate cuts could put downward pressure on the AUD/USD pair, as Australia's currency may weaken compared to the US dollar, especially if US interest rates remain high to combat inflation.
AUD/USD - Technical Analysis
In today’s foreign exchange market, the AUD/USD pair is experiencing a notable decline, currently trading at $0.65977, down by 0.43%. This downward movement places the pair just above a significant pivot point at $0.65738, which serves as a potential turning point for future price movements.
The currency pair faces immediate resistance at $0.66460. If overcome, further hurdles await at $0.66907 and $0.67416. These resistance levels will play a critical role in determining the pair's short-term trajectory, especially if bullish momentum resumes.
Conversely, the AUD/USD has established substantial support at $0.65192, with additional lower supports at $0.64669 and $0.64110. These points could provide significant bounce-back potential should the pair continue its descent.
Technical indicators offer a mixed but slightly bearish view. The Relative Strength Index (RSI) is moderately placed at 54, suggesting that there is neither excessive bullish nor bearish momentum currently influencing the market.
However, the proximity of the 50-Day Exponential Moving Average (EMA) at $0.65531 just below the pivot reinforces the pivotal nature of current price levels.
Related News
- Gold Price Analysis – May 07, 2024
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Consider short positions if AUD/USD breaks below the pivot point of $0.65738, aiming for an initial target at $0.65192 and adjusting stops to the $0.66344 resistance level.
- Monitor resistance at $0.66460; breaching this could invalidate the bearish outlook and shift momentum upwards.
- Stay cautious around the 50-Day EMA, as it could act as a dynamic support influencing the pair’s stability.
In today’s foreign exchange market, the AUD/USD pair is experiencing a notable decline, currently trading at $0.65977, down by 0.43%. This downward movement places the pair just above a significant pivot point at $0.65738, which serves as a potential turning point for future price movements.
The currency pair faces immediate resistance at $0.66460. If overcome, further hurdles await at $0.66907 and $0.67416. These resistance levels will play a critical role in determining the pair's short-term trajectory, especially if bullish momentum resumes.
Conversely, the AUD/USD has established substantial support at $0.65192, with additional lower supports at $0.64669 and $0.64110. These points could provide significant bounce-back potential should the pair continue its descent.
Technical indicators offer a mixed but slightly bearish view. The Relative Strength Index (RSI) is moderately placed at 54, suggesting that there is neither excessive bullish nor bearish momentum currently influencing the market.
However, the proximity of the 50-Day Exponential Moving Average (EMA) at $0.65531 just below the pivot reinforces the pivotal nature of current price levels.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.66344
Take Profit – 0.65738
Stop Loss – 0.66755
Risk to Reward – 1: 1.4
Profit & Loss Per Standard Lot = +$606/ -$411
Profit & Loss Per Mini Lot = +$60/ -$41
AUD/USD Price Analysis – May 2, 2024
Daily Price Outlook
Despite the weaker-than-expected Trade Balance and Building Permits data, the AUD/USD currency pair maintained its upward rally and remained well bid around the 0.6541 level, hitting the intraday high of 0.6550 level.
However, the reason for its upward trend can be associated with the risk-on market sentiment, which tends to underpin riskier assets like the Australian dollar.
Moreover, the hawkish sentiment surrounding the Reserve Bank of Australia’s (RBA) maintaining higher interest rates was seen as another key factor that kept the AUD/USD pair higher.
On the other side, the US dollar lost some traction following dovish remarks from Federal Reserve Chairman Jerome Powell. Powell dismissed the likelihood of a further rate hike, contributing to pressure on the US dollar and further boosting the AUD/USD currency pair.
Impact of RBA's Hawkish Stance and Economic Data on AUD/USD Pair
On the AUD front, the Australian Dollar is gaining ground because the Reserve Bank of Australia (RBA) is showing a hawkish attitude, meaning they're inclined to keep interest rates high in 2024. Recent domestic inflation data exceeding expectations has fueled speculation that the RBA might delay any rate cuts. ANZ predicts the RBA could begin reducing rates in November due to the inflation data.
On the data front, Australia's Trade Balance in April showed a surplus of 5,024 million, below the expected increase to 7,370 million from the previous 7,370 million. Building Permits also fell short, rising by 1.9% in March instead of the expected 3.0%. February's reading was -1.9%, indicating a slight improvement in construction activity.
Therefore, the hawkish stance of the RBA, fueled by strong inflation data, supports the AUD. However, weaker-than-expected trade balance and building permits data may slightly dampen the AUD/USD pair's momentum.
Impact of US Federal Reserve's Dovish Stance and Economic Data on AUD/USD Pair
On the US front, the US dollar is facing pressure after Federal Reserve Chairman Jerome Powell's comments following Wednesday's interest rate decision. Powell indicated that there's little chance of another rate hike, adding to the USD's downward pressure. As anticipated, the US Federal Reserve (Fed) chose to keep interest rates steady at 5.25%-5.50% in May.
Powell also noted a slowdown in progress on inflation, suggesting it will take longer than expected for inflation to reach the Fed's 2% target. He mentioned that if strong job growth continues but inflation remains low, it would justify delaying rate hikes.
On the data front, the ADP US Employment Change showed that private businesses added 192,000 workers to their payrolls in April, exceeding the expected increase of 175,000 and the previous month's 208,000.
However, the ISM US Manufacturing PMI dropped to 49.2 in April from March's 50.3, contrary to expectations of remaining steady. This indicates a contraction in the US manufacturing sector, failing to maintain the growth observed in the previous month, which marked the first expansion in 16 months.
Therefore, the dovish stance of the US Federal Reserve and mixed economic data from the US, with strong job growth but a contraction in manufacturing, could support the AUD/USD pair's upward movement.
AUD/USD - Technical Analysis
The Australian Dollar (AUD) against the US Dollar (USD) shows a modest uptick in today's trading session, with a price increase to $0.65449, marking a rise of 0.29%. This positive movement highlights a rebound from previous sessions and positions the currency pair near critical technical levels.
The pivot point for today is set at $0.65167, serving as a baseline for intraday fluctuations. Resistance levels for the AUD/USD are identified at $0.65806, $0.66292, and $0.66878. These are key thresholds where the currency pair might face selling pressure.
On the downside, immediate support lies at $0.64669. Further support levels are established at $0.64110 and $0.63642, which could stabilize price drops.
Technical indicators provide additional insights; the Relative Strength Index (RSI) is currently at 60, indicating a slight tilt towards overbought conditions but still within a normal range. The 50-day Exponential Moving Average (EMA) at $0.65047 supports the bullish sentiment, as it lies below the current price, suggesting an upward trend.
Given these observations, a strategic approach for traders would be to look for entry opportunities above the pivot point. Specifically, initiating a buy above $0.65154 could be prudent, with a take profit target at $0.65811 and a stop loss set at $0.64785 to manage risks effectively.
Related News
- USD/JPY Price Analysis – May 2, 2024
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Price Movement Insight: AUD/USD is up by 0.29%, trading at $0.65449, indicating a positive shift in market sentiment.
- Critical Trading Levels: The currency faces immediate resistance at $0.65806, with further barriers at $0.66292 and $0.66878; support begins at $0.64669.
- Technical Indicators and Strategy: RSI near 60 suggests a mildly bullish outlook; buying above $0.65154 with targets at $0.65811 is recommended.
The Australian Dollar (AUD) against the US Dollar (USD) shows a modest uptick in today's trading session, with a price increase to $0.65449, marking a rise of 0.29%. This positive movement highlights a rebound from previous sessions and positions the currency pair near critical technical levels.
The pivot point for today is set at $0.65167, serving as a baseline for intraday fluctuations. Resistance levels for the AUD/USD are identified at $0.65806, $0.66292, and $0.66878.
These are key thresholds where the currency pair might face selling pressure. On the downside, immediate support lies at $0.64669. Further support levels are established at $0.64110 and $0.63642, which could stabilize price drops.
Technical indicators provide additional insights; the Relative Strength Index (RSI) is currently at 60, indicating a slight tilt towards overbought conditions but still within a normal range.
The 50-day Exponential Moving Average (EMA) at $0.65047 supports the bullish sentiment, as it lies below the current price, suggesting an upward trend.
Given these observations, a strategic approach for traders would be to look for entry opportunities above the pivot point. Specifically, initiating a buy above $0.65154 could be prudent, with a take profit target at $0.65811 and a stop loss set at $0.64785 to manage risks effectively.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.65154
Take Profit – 0.65811
Stop Loss – 0.64785
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$657/ -$369
Profit & Loss Per Mini Lot = +$65/ -$36
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD falls to $0.65315, down 0.49%, indicating cautious market sentiment.
- Resistance at $0.66054, with further decline possible if levels aren't breached.
- Sell strategy below $0.65598, with clear profit and stop loss targets set.
On April 30, the Australian Dollar (AUD/USD) closed at $0.65315, marking a decline of 0.49%. This downturn reflects a broader trend of caution in the forex markets, influenced by economic uncertainties and fluctuating risk appetites globally. Trading below the pivotal point of $0.65689, the AUD/USD is situated in a precarious position, suggesting potential further weakness. Resistance is set at higher thresholds of $0.66054, $0.66434, and $0.66878, which need to be surpassed to signal a shift towards a bullish outlook. Conversely, support levels are firmly established at $0.64849, $0.64425, and $0.64103, providing potential stopping points for further declines.
The currency pair’s technical indicators provide additional insight into its current dynamics. The 50-Day Exponential Moving Average (EMA), at $0.64853, lies just below the current trading price, indicating a near support zone that could stabilize further price drops. The Relative Strength Index (RSI) at 51 suggests a neutral momentum, pointing neither to overbought nor oversold conditions, which indicates that the currency could sway in either direction based on upcoming economic data and market sentiment.
Entry Price: Sell below $0.65598 if the AUD/USD continues to show weakness. Take Profit: Target a take profit at $0.65034 to capture potential downward movement. Stop Loss: Set a stop loss at $0.66054 to limit risks against unexpected bullish reversals.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.65598
Take Profit – 0.65034
Stop Loss – 0.66054
Risk to Reward – 1: 1.2
Profit & Loss Per Standard Lot = +$564/ -$456
Profit & Loss Per Mini Lot = +$56/ -$45
USD/CAD Price Analysis – April 30, 2024
Daily Price Outlook
During the European trading session, the USD/CAD currency pair maintained its upward rally and remained well-bid around the 1.3683 level, hitting the intra-day high of 1.3701. The reason for its upward trend could be attributed to the renewed strength of the US Dollar (USD), which provided some support to the pair. However, the US dollar gained traction in the wake of growing acceptance that the Federal Reserve (Fed) will keep rates higher for longer.
Meanwhile, the decline in oil prices was seen as another key factor that kept the USD/CAD pair higher as the Canadian dollar (Loonie) is negatively affected by falling oil prices. Canada's economy relies heavily on oil exports, leading to decreased demand for the currency.
Moving ahead, Investors will keep an eye on the Canadian February Gross Domestic Product (GDP) growth number. The attention will shift to the Federal Open Market Committee's (FOMC) interest rate decision on Wednesday.
Expectation of Higher US Interest Rates Boosts USD/CAD Pair
On the US front, the US dollar gained strength as investors expect the Federal Reserve to keep interest rates high due to ongoing inflation. Fed officials, like Michelle Bowman and Neel Kashkari, don't see the need to lower rates and even suggest the possibility of no rate cuts this year. Some, like Raphael Bostic, might even consider raising rates if inflation worsens. This expectation of higher rates supports the USD, benefiting the USD/CAD pair.
The upcoming FOMC meeting is expected to maintain current rates, with investors watching for any hawkish signals in the statement and press conference, which could strengthen the US dollar further.
Therefore, the expectation of higher US interest rates due to inflation has strengthened the US dollar, benefiting the USD/CAD pair. This trend may continue if the FOMC maintains a hawkish stance.
Bank of Canada Policy Rate and Oil Prices: Impact on USD/CAD
On the Canadian front, traders anticipate that the Bank of Canada (BoC) will likely wait until June or July before considering any cuts to its policy rate. The upcoming February Gross Domestic Product (GDP) data could provide insights into the Canadian economy's performance.
If the report indicates weaker-than-expected data, the BoC might be prompted to consider interest rate cuts sooner, which could weigh on the Canadian dollar (CAD). On the flip side, if the report indicates stronger-than-expected data, the BoC may delay potential interest rate cuts, which could support the Canadian dollar (CAD).
Another factor that has been boosting the USD/CAD pair is the continued decline in oil prices. Canada's economy relies heavily on oil exports, leading to decreased demand for the currency and contributing to the USD/CAD pair's gains.
USD/CAD - Technical Analysis
On April 30, the USD/CAD traded slightly higher at 1.36811, marking an increase of 0.15%. This uptick reflects subtle shifts in market sentiment as traders respond to evolving economic indicators and geopolitical events. The currency pair now hovers just below its critical pivot point at 1.3756, indicating potential volatility in the near term.
The USD/CAD faces immediate resistance at 1.3735, with subsequent thresholds at 1.3788 and 1.3861 that could limit upward movement. Should the pair break through these barriers, it may signal strengthening momentum for the U.S. dollar against the Canadian dollar, influenced by diverging economic policies or shifts in commodity prices, particularly oil, a significant export for Canada. Conversely, the support levels are established at 1.3614, 1.3562, and 1.3516. A decline below these points could suggest growing bearish pressure, potentially due to stronger Canadian economic performance or higher crude oil prices.
Technical indicators such as the Relative Strength Index (RSI) at 52 and the 50-Day Exponential Moving Average (EMA) at 1.3701 offer additional insights. The RSI indicates a neutral momentum, suggesting that the pair is neither overbought nor oversold, while the EMA provides a benchmark for the currency’s current resistance level.
Related News
- GOLD Price Analysis – April 30, 2024