AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- The AUD/USD shows resilience but faces resistance near 0.6631, suggesting caution.
- Overbought conditions and a double-top pattern hint at potential reversal points.
- Strategic entry and exit points set for cautious trading amidst potential volatility.
The AUD/USD pair experienced a notable uptick in the March 21 trading session, marking a 0.62% rise to settle at 0.66257. This movement signifies a resurgence in bullish sentiment, yet the currency pair encounters a pivotal juncture at the 0.6631 pivot point. Resistance levels at 0.6649, 0.6666, and 0.6686 delineate the potential ceilings for further gains, while support levels established at 0.6597, 0.6573, and 0.6552 provide floors to cushion any downward pressures.
Technical indicators suggest a nuanced picture; the Relative Strength Index (RSI) at 71 indicates a market that is veering into overbought territory, hinting at potential pullbacks. Moreover, the formation of a double-top pattern near the 0.6630 level suggests that the Australian dollar may struggle to sustain its upward momentum, with a close beneath this pivotal mark potentially ushering in a bearish correction phase.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.66309
Take Profit – 0.65929
Stop Loss – 0.66651
Risk to Reward – 1: 1.1
Profit & Loss Per Standard Lot = +$380/ -$342
Profit & Loss Per Mini Lot = +$38/ -$34
AUD/USD Price Analysis – March 21, 2024
Daily Price Outlook
The AUD/USD currency pair maintained its upward rally and remained well bid around the 0.6631 level. The reason for its upward trend can be attributed to the risk-on market sentiment, which tends to underpin the Australian dollar and contribute to the gains of the AUD/USD currency pair. Apart from this, positive employment data from Australia was seen as another key factor that kept the AUD/USD pair higher, as it indicates a strong economy, boosting investor confidence in the Australian dollar (AUD), leading to increased demand and a higher value against the US dollar (USD).
Moreover, the bearish US dollar, driven by the dovish Fed outlook, has played a major role in underpinning the AUD/USD currency pair. The Federal Reserve plans to reduce interest rates by 75 basis points throughout the year, signaling a commitment to accommodative monetary policy in response to economic conditions. This weakens the US dollar and potentially strengthens the AUD/USD pair.
Australian Economic Indicators Impact Currency Markets
On the data front, Australian Employment Change for February surged to 116.5K, exceeding expectations of 40.0K and the previous figure of 15.3K. However, the Unemployment Rate increased to 3.7%, lower than the expected 4.0% and the previous 4.1%. The preliminary Judo Bank Services PMI rose to 53.5 from the previous figure of 53.1, while the Composite PMI showed a slight uptick to 52.4 compared to the previous 52.1.
Hence, the positive employment data from Australia, including a surge in employment change and a lower-than-expected unemployment rate, likely strengthened the Australian Dollar (AUD) against other currencies, potentially leading to gains in the AUD/USD currency pair.
China's Monetary Policy Stability and Positive China-Australia Relations Boost AUD Confidence
On the China front, the People’s Bank of China (PBoC) maintaining its interest rate at 3.45% suggests stability in China's monetary policy, influencing investor sentiment towards the Australian Dollar (AUD). Additionally, the positive tone from the meeting between Chinese Foreign Minister Wang Yi and Australia's Foreign Affairs Minister Penny Wong, highlighting the strong potential and positive trajectory of China-Australia relations, could bolster confidence in the AUD.
US Interest Rate Expectations and Economic Data Impact AUD/USD Exchange Rate
On the US front, the value of the US dollar didn't continue its recent rise and fell on Thhursday. This drop happened because the Federal Reserve announced a plan to cut interest rates three times this year. This could lead to a relative strength in the Australian dollar (AUD) against the US dollar (USD), causing the AUD/USD pair to remain higher.
On the data front, US Building Permits for February increased to 1.518 million, surpassing the expected 1.495 million and the prior figure of 1.489 million. Meanwhile, the housing Starts also saw a rise to 1.521 million from the previous 1.374 million, beating the anticipated 1.425 million. However, the preliminary Michigan Consumer Sentiment Index for March dipped to 76.5 from 76.9, contrary to expectations of no change.
Hence, the positive data on building permits and housing starts might influence the Fed's interest rate decision by indicating strong economic activity.
AUD/USD - Technical Analysis
The AUD/USD pair experienced a notable uptick in the March 21 trading session, marking a 0.62% rise to settle at 0.66257. This movement signifies a resurgence in bullish sentiment, yet the currency pair encounters a pivotal juncture at the 0.6631 pivot point. Resistance levels at 0.6649, 0.6666, and 0.6686 delineate the potential ceilings for further gains, while support levels established at 0.6597, 0.6573, and 0.6552 provide floors to cushion any downward pressures.
Technical indicators suggest a nuanced picture; the Relative Strength Index (RSI) at 71 indicates a market that is veering into overbought territory, hinting at potential pullbacks. Moreover, the formation of a double-top pattern near the 0.6630 level suggests that the Australian dollar may struggle to sustain its upward momentum, with a close beneath this pivotal mark potentially ushering in a bearish correction phase.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD experiences a decline to 0.65217, hinting at continued bearish momentum with immediate support and resistance levels in focus.
- Strong bearish sentiment indicated by RSI at 26 and a bearish engulfing pattern below the 0.6550 pivot point.
- Recommended selling strategy below 0.65368 with targets and stop loss levels set to capitalize on the bearish outlook.
The AUD/USD pair faced a downturn, marking a 0.44% decrease to 0.65217. This movement places the pair in a delicate position as it navigates through significant technical levels. The currency faces its pivot point at 0.6551, suggesting a critical juncture for future price action. Resistance levels are staged at 0.6573, 0.6596, and 0.6624, providing potential barriers to upward movements. Conversely, immediate support at 0.6520, followed by further supports at 0.6479 and 0.6450, illustrates key levels where the pair might find a floor.
The technical outlook is further compounded by an RSI indicator at 26, indicating a strong bearish momentum and potential overselling conditions. The appearance of a bearish engulfing candlestick pattern below the 0.6550 level underscores the selling pressure, suggesting the likelihood of a continued downtrend. Additionally, the 50-day EMA at 0.6574 acts as a near-term resistance level, reinforcing the bearish outlook.
Given these conditions, a cautious approach is recommended for traders, with a proposed sell entry below 0.65368. The suggested take profit level at 0.64828 and a stop loss at 0.65718 aim to manage risk while capitalizing on the pair's current bearish trend. (edited)
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.65368
Take Profit – 0.64828
Stop Loss – 0.65718
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$540/ -$350
Profit & Loss Per Mini Lot = +$54/ -$35
AUD/USD Price Analysis – March 19, 2024
Daily Price Outlook
Despite the risk-on market sentiment, the AUD/USD currency pair failed to stop its downward trend and remained under pressure due to the combination of negative factors, including the performance of domestic equity markets which experience thin trading activity due to market caution. However, the reason for its downward trend can also be attributed to the bullish US dollar, which has been gaining support on the back of the Fed's hawkish outlook. This signals confidence in a stronger US economy, which can lead to increased investment and optimism among traders and investors, positively impacting market sentiment.
Australian Economic Outlook and Impact on AUD/USD Pair
On the Australian front, the benchmark S&P/ASX 200 Index maintained its upward trend, which was driven by gains in energy and real estate sectors. This uptick in the stock market lend some support to the Australian Dollar (AUD). However, Australia's economy grew less than expected in Q4 2023, sparking speculation about potential rate cuts by the Reserve Bank of Australia later this year.
On the data front, the ANZ-Roy Morgan Australian Consumer Confidence index dipped slightly to 81.7, with Westpac predicting the central bank will likely keep its cash rate steady at 4.35%. ANZ Bank analysts foresee the Reserve Bank of Australia maintaining a cautious stance, although no interest rate adjustments are anticipated.
Therefore, the rise in the S&P/ASX 200 Index support the AUD, but concerns about Australia's economic growth and potential rate cuts could weigh on sentiment.
Chinese Economic Resilience and Impact on AUD/USD Pair
Another factor that could boost the AUD/USD pair was the positive Retail Sales and Industrial Production figures from China, which signal resilience in its economy, boosting global sentiment. This could indirectly benefit the AUD/USD pair, as Australia's economy heavily relies on Chinese demand for its exports, potentially strengthening the Australian Dollar against the US Dollar.
On the China data front, Retail Sales in February surpassed expectations, growing by 5.5% year-on-year, higher than the anticipated 5.2% and the previous 7.4%. Meanwhile, Industrial Production also exceeded forecasts, rising by 7.0% year-on-year, compared to the expected 5.0% and the prior 6.8%. These positive figures indicate resilience in the world's second-largest economy, suggesting potential support for global sentiment.
US Economic Update and Impact on AUD/USD Pair
On the US front, the upward trend in the US dollar, backed by the hawkish Fed outlook, was seen as a key factor that could cap gains in the AUD/USD pair. However, the probability of a rate cut in March is low at 1.0%, increasing to 8.7% in May.
On the data front, the US Michigan Consumer Sentiment Index for March declined to 76.5 from 76.9, defying expectations of no change. Industrial Production edged up by 0.1% in February, contrary to the expected flat reading, but an improvement from the previous month's decline. The Core Producer Price Index held steady at 2.0% year-over-year in February, exceeding the expected 1.9%. US PPI rose by 1.6% year-over-year and 0.6% month-over-month, surpassing forecasts, suggesting heightened inflationary pressures. Therefore, the strengthening US dollar, supported by a hawkish Fed outlook, may limit gains for the AUD/USD pair.
AUD/USD - Technical Analysis
The AUD/USD pair faced a downturn, marking a 0.44% decrease to 0.65217. This movement places the pair in a delicate position as it navigates through significant technical levels. The currency faces its pivot point at 0.6551, suggesting a critical juncture for future price action. Resistance levels are staged at 0.6573, 0.6596, and 0.6624, providing potential barriers to upward movements. Conversely, immediate support at 0.6520, followed by further supports at 0.6479 and 0.6450, illustrates key levels where the pair might find a floor.
The technical outlook is further compounded by an RSI indicator at 26, indicating a strong bearish momentum and potential overselling conditions. The appearance of a bearish engulfing candlestick pattern below the 0.6550 level underscores the selling pressure, suggesting the likelihood of a continued downtrend. Additionally, the 50-day EMA at 0.6574 acts as a near-term resistance level, reinforcing the bearish outlook.
Given these conditions, a cautious approach is recommended for traders, with a proposed sell entry below 0.65368. The suggested take profit level at 0.64828 and a stop loss at 0.65718 aim to manage risk while capitalizing on the pair's current bearish trend.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD dips to 0.66152, facing resistance at 0.6668; supports at 0.6595 hint at a cautious market stance.
- Mixed signals: RSI at 55 and an upward EMA trend counterbalanced by bearish patterns, suggesting a nuanced market outlook.
- Recommended approach: Buy above 0.66035, aiming for 0.66580 with a stop loss at 0.65733, based on current technical indicators.
On March 14, the AUD/USD pair slightly retreated, marking a 0.10% decrease to close at 0.66152. This movement reflects the pair's sensitivity to the latest economic data and shifts in market sentiment.
The technical landscape for AUD/USD is characterized by a mix of bullish and bearish signals. The pair's current position below the pivot point at 0.6658 suggests a cautious market outlook. Immediate resistance levels are located at 0.6668, 0.6698, and 0.6724, which could limit upward moves. On the downside, support is found at 0.6595, followed by 0.6573 and 0.6550, offering potential rebound points.
Technical indicators provide a nuanced view of the pair's future direction. The Relative Strength Index (RSI) stands at 55, indicating a slight bias towards buying pressure, while the 50-day Exponential Moving Average (EMA) at 0.6590 underscores a general uptrend. However, the presence of a double top formation near $0.6640 and a bearish engulfing candle on the 4-hour chart warn of possible selling activity ahead.
Considering these factors, the AUD/USD outlook suggests a cautiously optimistic trend with a recommendation for a buying strategy above 0.66035. Setting a take-profit at 0.66580 and a stop loss at 0.65733 could capitalize on the pair's current momentum while mitigating risks associated with potential downward corrections.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.66035
Take Profit – 0.66580
Stop Loss – 0.65733
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$545/ -$302
Profit & Loss Per Mini Lot = +$54/ -$30
AUD/USD Price Analysis – March 14, 2024
Daily Price Outlook
The AUD/USD currency pair remains under pressure amidst a combination of factors, including the performance of domestic equity markets, Australian economic indicators, and expectations regarding US monetary policy. Meanwhile, the decrease in the NAB Business Confidence Index exert some downward pressure on the AUD/USD pair, but the improvement in the NAB Business Conditions Index could offset this effect to some extent. Traders are closely monitoring developments in economic data releases, central bank announcements, and geopolitical events for further insights into the currency pair's direction.
Although, the losses in the AUD/USD currency pair could be short-lived as the Reserve Bank of Australia (RBA) continues to suggest it may need to raise rates even further. Philip Lowe's statement, along with Michelle Bullock's warning, suggesting potential interest rate increases, could bolster confidence in the Australian dollar, potentially leading to a positive impact on the AUD/USD pair.
Furthermore, the meeting between Wang Yi and Penny Wong could positively impact the AUD/USD pair if discussions lead to progress on economic cooperation, particularly the removal of trade barriers. However, sensitive issues like human rights and regional security could introduce uncertainty, affecting the currency pair negatively.
Australian Economic Data and Central Bank Commentary Impact on AUD/USD Pair
On the data front, Australia's NAB Business Confidence Index dipped to 0 in February, down from 1 in the prior month. This suggests a stall in business sentiment. However, there's a brighter note as the NAB Business Conditions Index rose to 10 from the revised reading of 7 (initially 6). This indicates improved business conditions, likely driven by factors such as economic recovery efforts and increased consumer spending. While the drop in confidence might raise concerns, the uptick in business conditions could provide some reassurance and potentially support economic growth moving forward.
It is worth noting that the Former RBA Governor Philip Lowe stated that there is a two-way risk on interest rates, indicating that rates could either rise or fall. This statement, coupled with current RBA Governor Michelle Bullock's warning that rates might need to increase, suggests a potential strengthening of the Australian dollar (AUD) against the US dollar (USD). If the RBA raises interest rates, it could attract foreign investors seeking higher returns, leading to an increased demand for the AUD. This increased demand could drive up the value of the AUD relative to the USD, making it more positive for the AUD/USD currency pair.
Prospects of Improved Trade Relations Between Australia and China Boost AUD/USD Pair
Another factor that could boost the AUD/USD pair was the upcoming meeting between Chinese Foreign Minister Wang Yi and Australia's Foreign Affairs Minister Penny Wong. The discussions are expected to include economic issues such as the removal of trade barriers, which could benefit both countries and contribute to increased trade activity.
This prospect of improved trade relations between Australia and China could positively impact the Australian dollar (AUD) due to increased demand for Australian exports, potentially strengthening the currency against the US dollar (USD). Additionally, positive outcomes from the meeting may instill confidence in the market, further supporting the AUD/USD pair.
US Dollar Strength and Economic Data Impact on AUD/USD Pair
On the US front, the bullish bias in the US dollar, backed by the hawkish Fed outlook, was seen as a key factor that could cap gains in the AUD/USD pair. Meanwhile, Yellen's cautious outlook on interest rates could bolster the US dollar against the Australian dollar (AUD), as it suggests potential for higher rates. This could attract investors to the USD, diminishing demand for the AUD and weakening the AUD/USD pair. Confidence in fiscal planning assumptions may also influence currency sentiment.
On the data front, US Consumer Price Index (CPI) figures for February showed a year-over-year increase of 3.2%, surpassing estimates and indicating rising inflation. The monthly index met expectations at 0.4%, signaling a consistent trend. Core CPI, excluding volatile food and energy prices, rose 3.8% year-over-year, slightly above expectations. However, the Monthly Budget Statement revealed a deficit of $296 billion in February, lower than expected but significantly higher than the previous month.
AUD/USD - Technical Analysis
On March 14, the AUD/USD pair slightly retreated, marking a 0.10% decrease to close at 0.66152. This movement reflects the pair's sensitivity to the latest economic data and shifts in market sentiment.
The technical landscape for AUD/USD is characterized by a mix of bullish and bearish signals. The pair's current position below the pivot point at 0.6658 suggests a cautious market outlook. Immediate resistance levels are located at 0.6668, 0.6698, and 0.6724, which could limit upward moves. On the downside, support is found at 0.6595, followed by 0.6573 and 0.6550, offering potential rebound points.
Technical indicators provide a nuanced view of the pair's future direction. The Relative Strength Index (RSI) stands at 55, indicating a slight bias towards buying pressure, while the 50-day Exponential Moving Average (EMA) at 0.6590 underscores a general uptrend. However, the presence of a double top formation near $0.6640 and a bearish engulfing candle on the 4-hour chart warn of possible selling activity ahead.
Considering these factors, the AUD/USD outlook suggests a cautiously optimistic trend with a recommendation for a buying strategy above 0.66035. Setting a take-profit at 0.66580 and a stop loss at 0.65733 could capitalize on the pair's current momentum while mitigating risks associated with potential downward corrections.
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AUD/USD Price Analysis – March 12, 2024
Daily Price Outlook
Despite the bearish US dollar, the AUD/USD currency pair was unable to halt its previous session's losing streak and is still showing sluggish performance around 0.6609. However, the sluggish bias could be attributed to the decrease in the NAB Business Confidence Index, suggesting weakened business sentiment. This could potentially impact the Australian dollar negatively due to reduced investor confidence. Furthermore, the risk-off market sentiment tends to undermine riskier assets like the Australian Dollar (AUD) and has contributed to the AUD/USD pair's losses.
In contrast, the increased trade surplus indicates a strong economy, but the slightly lower-than-expected GDP growth might temper the positive impact on the Australian dollar. Furthermore, the abolition of import tariffs is likely positive for the Australian dollar as it enhances trade efficiency, reduces business costs, and signals economic liberalization, boosting investor confidence in the currency. Meanwhile, the mixed data from China, with CPI beating expectations but PPI falling short, have a neutral impact on the Australian dollar as it reflects both positive and negative economic indicators from Australia's largest trading partner.
Impact of Australian Economic Data on AUD/USD Pair
On the data front, Australia's NAB Business Confidence Index dipped to 0 in February, down from 1 in the previous month, while the NAB Business Conditions Index improved to 10 from 7 (revised from 6). Meanwhile, the Australian Trade Balance surplus rose to $11,027 million in February, slightly below the market's expected increase to $11,500 million. GDP grew by 0.2% QoQ in Q4 2023, slightly below expectations of 0.3%, with YoY expansion at 1.5%, surpassing expectations of 1.4% but falling short of the previous 2.1% growth.
Moreover, Treasurer Jim Chalmers announced the government's plan to abolish nearly 500 import tariffs from July 1, 2024, aiming to streamline trade and save businesses over A$30 million annually in compliance costs.
Therefore, the mixed economic data, including the drop in business confidence and the slight GDP growth miss, weaken the Australian dollar (AUD) against the US dollar (USD). However, the tariff abolition announcement provide some support, potentially limiting the AUD/USD downside.
Impact of Chinese Economic Data on AUD/USD Pair
On the China front, China's Consumer Price Index (CPI) rebounded in February, rising by 0.7% year-over-year after a 0.8% decline in January, surpassing market expectations. Monthly CPI inflation also exceeded expectations, increasing by 1.0% compared to a 0.3% rise in January. However, the Producer Price Index (PPI) dropped by 2.7% year-over-year in February, a larger decline than the 2.5% seen in January and below market expectations.
Therefore, the mixed data from China, with CPI surpassing expectations but PPI weakening, could influence the AUD/USD pair. The CPI rebound might offer support to the Australian dollar (AUD) against the US dollar (USD), while concerns over deflationary pressures from the weaker PPI could weigh on sentiment.
Impact of US Economic Data and Geopolitical Tensions on AUD/USD Pair
On the US front, the weakening US dollar could support the AUD/USD pair as disappointing macro data fuels expectations of rate cuts. Federal Reserve Chair Jerome Powell hinted at potential rate reductions if inflation hovers around 2%, further dampening the dollar. Meanwhile, the upcoming US CPI report could intensify rate cut expectations, impacting dollar. Powell's remarks on inflation's influence on rate cuts add to market uncertainty, creating short-term trading opportunities for gold.
On the geopolitical front, ongoing tensions in the Middle East have created a risk-off market sentiment. This has negatively impacted riskier assets like the Australian Dollar (AUD), keeping the AUD/USD pair under pressure. However, the situation intensified with ongoing Israeli attacks on Gaza, resulting in a high number of casualties and injuries. This instability has contributed to a cautious market environment, affecting currencies like the Australian Dollar.
AUD/USD - Technical Analysis
The Australian Dollar against the US Dollar (AUD/USD) saw a minor uptick, registering a 0.03% increase to 0.66156. The currency pair's movement remains constrained, signaling a cautious approach among traders. A detailed look at the four-hour chart reveals a critical pivot point at 0.66162, which the AUD/USD hovers just below, indicating a delicate balance in market sentiment.
Resistance levels are outlined at 0.66506, 0.66856, and 0.67296, suggesting potential hurdles should the pair attempt an upward movement. Conversely, support is established at lower thresholds of 0.65733, 0.65348, and 0.64777, marking zones where declines may be arrested. The Relative Strength Index (RSI) at 57 denotes a neutral market condition, neither overbought nor oversold, supporting the potential for either direction.
Additionally, the 50-day Exponential Moving Average (EMA) at 0.65746, slightly below the current price, could offer a foundation for support. However, the presence of several Doji candles below the pivot point of 0.6616 hints at indecision and a potential tilt towards slight selling pressure.
Given these dynamics, the overall outlook suggests a cautious bearish sentiment for the AUD/USD pair. Traders might consider a selling strategy below the pivot point of 0.66161, targeting a take profit level at 0.65755, with a stop loss placed at 0.66357. This recommendation aligns with the observed technical patterns and the current stance of the market indicators.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD's slight increase reflects market hesitation, with key resistance and support levels delineating potential price action.
- RSI and 50 EMA indicators present a neutral to slightly bearish market outlook, suggesting cautious trading.
- The formation of Doji candles below the pivot hints at possible selling, aligning with a cautious bearish trading strategy.
The Australian Dollar against the US Dollar (AUD/USD) saw a minor uptick, registering a 0.03% increase to 0.66156. The currency pair's movement remains constrained, signaling a cautious approach among traders. A detailed look at the four-hour chart reveals a critical pivot point at 0.66162, which the AUD/USD hovers just below, indicating a delicate balance in market sentiment.
Resistance levels are outlined at 0.66506, 0.66856, and 0.67296, suggesting potential hurdles should the pair attempt an upward movement. Conversely, support is established at lower thresholds of 0.65733, 0.65348, and 0.64777, marking zones where declines may be arrested. The Relative Strength Index (RSI) at 57 denotes a neutral market condition, neither overbought nor oversold, supporting the potential for either direction.
Additionally, the 50-day Exponential Moving Average (EMA) at 0.65746, slightly below the current price, could offer a foundation for support. However, the presence of several Doji candles below the pivot point of 0.6616 hints at indecision and a potential tilt towards slight selling pressure.
Given these dynamics, the overall outlook suggests a cautious bearish sentiment for the AUD/USD pair. Traders might consider a selling strategy below the pivot point of 0.66161, targeting a take profit level at 0.65755, with a stop loss placed at 0.66357. This recommendation aligns with the observed technical patterns and the current stance of the market indicators.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.66161
Take Profit – 0.65755
Stop Loss – 0.66357
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$406/ -$196
Profit & Loss Per Mini Lot = +$40/ -$19
AUD/USD Price Analysis – March 07, 2024
Daily Price Outlook
Despite geopolitical tensions and concerns about a slowdown in China, the AUDUSD currency pair has maintained an upward trend and remained well bid around the 0.6589 level. The bullish bias can be attributed to the upbeat Australian Trade Balance, which shows an increase slightly below expectations but still having a positive impact on the AUD currency, indicating strong trade performance. Moreover, the strong Chinese trade balance could further support the AUD due to Australia's close economic ties with China.
Furthermore, the upticks in the AUD/USD pair were bolstered by the weakening US dollar, which lost traction due to increasing expectations for an interest rate cut later this year. During a congressional testimony, Federal Reserve Chair Jerome Powell indicated that the Fed is likely to lower interest rates later in the year. This suggests that the Fed is concerned about economic conditions and is taking steps to stimulate the economy by making borrowing cheaper.
Australian and Chinese Economic Data Impact on AUDUSD Pair
On the data front, Australia's economy showed mixed results with fourth-quarter GDP growth at 0.2% QoQ, below the expected 0.3%, while YoY GDP expanded by 1.5%, slightly above expectations. Meanwhile, the Trade Balance surplus fell short, reaching 11,027M in February against the expected 11,500M, with imports rising by 1.3% and exports growing by 1.6%.
Moreover, the AiG Industry Index improved to -14.9, and the Judo Bank Services PMI surged to 53.1, indicating expansion. Despite lower GDP growth, economists from Commerzbank believe the Reserve Bank of Australia (RBA) will delay rate cuts, supporting the Australian Dollar (AUD) for now.
Therefore, the mixed economic data from Australia, including lower-than-expected GDP growth and a trade surplus shortfall, could put some pressure on the AUDUSD pair, but the expectation of delayed rate cuts by the RBA may help support the Australian Dollar.
On the China front, the Trade Balance soared to $125.16B in February, surpassing expectations of $103.7B and the previous $75.34B. Imports and exports both saw year-on-year increases, with imports up by 3.5% and exports rising by 7.1%. This strong performance suggests robust activity in China's trade sector. The impressive trade balance figures from China, along with increased imports and exports, may strengthen the AUDUSD pair as it signals strong economic activity in China, a key trading partner of Australia.
US Dollar Decline and Interest Rate Cut Expectations Impact on AUDUSD Pair
On the US front, the broad-based US dollar continued its decline and remained well offered around 103.23, mainly due to lower US Treasury yields and increasing expectations for an imminent interest rate cut later this year. Federal Reserve Chair Jerome Powell expressed confidence in the US economy, expecting inflation to gradually reach the 2% target. Powell emphasized that the Fed's decisions on interest rates will depend on incoming data.
On a mixed note, Steven Friedman, a former NY Fed economist, warned against rushing to cut interest rates due to strong economic growth and unpredictable inflation. He believes there will be fewer rate cuts in 2024 than people think. Atlanta Fed President Raphael Bostic also expressed doubt about smoothly managing the economy's transition, suggesting two small rate cuts might happen but warned against celebrating victory over inflation too soon.
However, market indicators show a low chance of an interest rate cut in March but higher probabilities for cuts in May and June. Therefore, the AUD/USD pair will likely strengthen due to the US dollar's decline and the possibility of rate cuts, with market indicators suggesting higher probabilities for cuts in May and June.
AUD/USD - Technical Analysis
The AUD/USD pair has exhibited a modest rise of 0.32% to trade at 0.65842, capturing the attention of traders and analysts alike. The pivot point, set at 0.6616, delineates a critical juncture for the currency pair, with immediate resistance levels at 0.6610, 0.6633, and a further resistance at 0.6650 suggesting potential areas of price contention. Conversely, support levels are positioned at 0.6562, 0.6536, and 0.6486, providing a safety net against downward pressures.
Technical indicators provide a clearer picture of the market sentiment. The Relative Strength Index (RSI) stands at 70, edging into overbought territory, which might hint at a potential pullback or consolidation in the near term. The Moving Average Convergence Divergence (MACD) echoes this bullish sentiment, with a value of 0.0009 above the signal line of 0.0002, indicating a possible continuation of upward momentum. The 50-Day Exponential Moving Average (EMA) at 0.6528 further supports this trend, offering a baseline of support.
Given these dynamics, the technical outlook for the AUD/USD remains bullish, suggesting an opportune moment for traders to consider a buy stop at 0.65890. Setting a take profit at 0.66158 and a stop loss at 0.65658 could optimize trade outcomes while managing risk. However, traders should remain vigilant, as the current overbought conditions may signal an impending trend reversal or consolidation phase.
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
The AUD/USD pair has exhibited a modest rise of 0.32% to trade at 0.65842, capturing the attention of traders and analysts alike. The pivot point, set at 0.6616, delineates a critical juncture for the currency pair, with immediate resistance levels at 0.6610, 0.6633, and a further resistance at 0.6650 suggesting potential areas of price contention. Conversely, support levels are positioned at 0.6562, 0.6536, and 0.6486, providing a safety net against downward pressures.
Technical indicators provide a clearer picture of the market sentiment. The Relative Strength Index (RSI) stands at 70, edging into overbought territory, which might hint at a potential pullback or consolidation in the near term. The Moving Average Convergence Divergence (MACD) echoes this bullish sentiment, with a value of 0.0009 above the signal line of 0.0002, indicating a possible continuation of upward momentum. The 50-Day Exponential Moving Average (EMA) at 0.6528 further supports this trend, offering a baseline of support.
Given these dynamics, the technical outlook for the AUD/USD remains bullish, suggesting an opportune moment for traders to consider a buy stop at 0.65890. Setting a take profit at 0.66158 and a stop loss at 0.65658 could optimize trade outcomes while managing risk. However, traders should remain vigilant, as the current overbought conditions may signal an impending trend reversal or consolidation phase.
AUD/USD - Trade Ideas
Entry Price – Buy Stop 0.65890
Take Profit – 0.66158
Stop Loss – 0.65658
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$268/ -$232
Profit & Loss Per Mini Lot = +$26/ -$23