Daily Price Outlook

The AUD/USD pair experienced a slight decline on March 5th, settling at 0.65016, marking a 0.11% decrease. This subtle movement reflects the pair's current volatility and the ongoing assessment of its position relative to its pivot point and key technical indicators.

The pivot point, established at 0.6486, delineates the immediate battleground for AUD/USD, with resistance levels positioned at 0.6527, 0.6566, and 0.6608, suggesting areas where upward momentum might face challenges. Support levels at 0.6447, 0.6407, and 0.6365 indicate potential cushioning zones against further declines, outlining critical points for the currency pair's short-term trajectory.

Technical indicators provide a nuanced view of the market's direction. The Relative Strength Index (RSI) at 42 hints at neither overbought nor oversold conditions, suggesting a relatively balanced market sentiment. The MACD's slight crossover above the signal line (Value: -0.0004, Signal: -0.0005) intimates potential for upward momentum, albeit within a context of overall market caution.

The 50-day EMA, stationed at 0.6511, hovers just above the current price, reinforcing a close contest between buyers and sellers. The outlined trading strategy suggests a bearish inclination with an entry price for selling below 0.64939, a take-profit target at 0.64711, and a stop loss set at 0.65086. This setup underscores the anticipation of minor adjustments within a tightly held trading range, indicating a cautious approach amid the current market dynamics.

AUD/USD - Trade Ideas

Entry Price – Sell Below 0.64939

Take Profit – 0.64711

Stop Loss – 0.65086

Risk to Reward – 1: 1.5

Profit & Loss Per Standard Lot = +$228/ -$147

Profit & Loss Per Mini Lot = +$22/ -$14

Daily Price Outlook

Despite the bearish US dollar, the AUD/USD currency pair was unable to halt its previous session's losing streak and remained under pressure around 0.6490. However, the bearish bias could be attributed to the risk-off market sentiment, which tends to undermine riskier assets like the Australian Dollar (AUD) and contributed to the AUD/USD pair's losses. On the other side, the Chinese Services PMI contraction to 52.5 in February from 52.7 prior could potentially impact AUD/USD negatively. This is because Australia's economy is closely tied to China's, and weaker Chinese data may reduce demand for Australian exports, putting pressure on the Australian dollar against the US dollar.

In contrast to this, the positive performance of the Judo Bank Services PMI, reaching a ten-month high and indicating expansion, was seen as a key factor that could help the AUD/USD pair to limit its losses. On the data front, the Judo Bank Services Purchasing Managers Index (PMI) hit a ten-month high of 53.1 in February, signaling expansion. The Composite PMI also rose to 52.1, the highest in nine months. Traders are eagerly anticipating the release of fourth-quarter 2023 Gross Domestic Product (GDP) data on Wednesday.

Australian Economic Indicators and Impact on AUD/USD Pair

Despite the Judo Bank Services Purchasing Managers Index (PMI) surging to a ten-month high of 53.1 in February, indicating expansion, the Australian Dollar remained under pressure. Besides this, the Composite PMI rose to 52.1, marking a nine-month high. However, the Australian Current Account Balance exceeded expectations at 11.8 billion in the fourth quarter of 2023.

According to the Australia Melbourne Institute, inflation slowed to a 4.0% year-over-year rise in February. Additionally, the ANZ-Roy Morgan Australian Consumer Confidence index dropped to 81.0, the lowest in 2024. Building permits and inflation had mixed results, with monthly figures declining but yearly metrics improving.

Meanwhile, the Manufacturing PMI showed a slight uptick to 47.8, while Retail Sales and Private Capital Expenditure improved. Economist Matthew De Pasquale notes the Services PMI's implication of a soft landing in 2023, with a resurgence in early 2024, though inflation's return to target remains uncertain.

Therefore, the impact of the data on the AUD/USD pair could be mixed as positive indicators like the PMI surges and strong current account balance could support the Australian Dollar, potentially leading to an increase in the AUD/USD pair. However, the drop in consumer confidence and uncertainty around inflation could cap gains in the AUD/USD pair.

Impact of Bearish US Dollar and Geopolitical Tensions on AUD/USD Pair

On the other side, the bearish US dollar was another factor that could help the AUD/USD pair. On the US front, the broad-based US dollar continued its declining rally and remained bearish in the wake of disappointing US macro data on Friday, along with less hawkish comments by Federal Reserve officials.

Apart from this, the risk-off market sentiment, pressured by geopolitical tensions, undermined riskier assets like the Australian Dollar (AUD), keeping the AUD/USD currency pair under pressure. The increasing tensions in the Middle East dampened risk sentiment, which affected the Australian Dollar. Since October 7, Israeli attacks on Gaza have injured over 30,000 Palestinians, while Hamas attacks in Israel have killed 1,139 people.

AUD/USD - Technical Analysis

The AUD/USD pair experienced a slight decline on March 5th, settling at 0.65016, marking a 0.11% decrease. This subtle movement reflects the pair's current volatility and the ongoing assessment of its position relative to its pivot point and key technical indicators.

The pivot point, established at 0.6486, delineates the immediate battleground for AUD/USD, with resistance levels positioned at 0.6527, 0.6566, and 0.6608, suggesting areas where upward momentum might face challenges. Support levels at 0.6447, 0.6407, and 0.6365 indicate potential cushioning zones against further declines, outlining critical points for the currency pair's short-term trajectory.

Technical indicators provide a nuanced view of the market's direction. The Relative Strength Index (RSI) at 42 hints at neither overbought nor oversold conditions, suggesting a relatively balanced market sentiment. The MACD's slight crossover above the signal line (Value: -0.0004, Signal: -0.0005) intimates potential for upward momentum, albeit within a context of overall market caution.

The 50-day EMA, stationed at 0.6511, hovers just above the current price, reinforcing a close contest between buyers and sellers. The outlined trading strategy suggests a bearish inclination with an entry price for selling below 0.64939, a take-profit target at 0.64711, and a stop loss set at 0.65086. This setup underscores the anticipation of minor adjustments within a tightly held trading range, indicating a cautious approach amid the current market dynamics.

Daily Price Outlook 

On February 29, the AUD/USD pair showed modest progress, ascending by 0.18% to reach 0.65167. This slight uptick reflects a tempered optimism in the forex market, as traders digest various global economic indicators and policy decisions.

The currency pair is currently trading just below its pivot point of 0.65258, indicating a critical juncture that could determine the direction of its next move. Resistance levels are set at 0.65579, 0.65829, and 0.66088, marking potential hurdles that the AUD/USD must overcome to sustain its upward trajectory. Conversely, support levels at 0.64904, 0.64698, and 0.64425 provide a safety net, potentially cushioning any downward pressure and serving as key areas for buyers to re-enter the market.

Technical indicators provide further insight into the pair's dynamics. The Relative Strength Index (RSI) stands at 44, suggesting a slight lean towards oversold conditions without fully crossing the threshold, indicating that there might be room for downward movement or consolidation. The 50-day Exponential Moving Average (EMA) at 0.65336, slightly above the current price, signals a potential resistance area that could influence the pair's short-term trend.

AUD/USD - Trade Ideas

Entry Price – Sell Below 0.65291

Take Profit – 0.64897

Stop Loss – 0.65531

Risk to Reward – 1: 1.6

Profit & Loss Per Standard Lot = +$394/ -$240

Profit & Loss Per Mini Lot = +$39/ -$24

Daily Price Outlook

Despite the risk-off market sentiment and the bullish US dollar, the AUD/USD currency pair managed to attract some bids and edged higher around the $0.6520 level. However, the upward movement can be attributed to the release of upbeat consumer spending data from Australia on Thursday. Australia's economy grew by 1.1% in January, which is lower than expected but still a positive turn compared to the 2.7% decline in the previous month. This bolstered confidence in the Australian dollar and contributed to the gains in the AUD/USD pair.

In contrast, the risk-off market sentiment, pressured by cautiousness ahead of the release of key US Personal Consumption Expenditures - Price Index data, was seen as a key factor that capped further gains in the AUD/USD pair by undermining riskier assets like the Australian dollar. Another factor that could cap gains in the AUD/USD pair is the bearish Aussie equity market, which opened lower following losses in the tech sector on the final day of company reporting.

Positive Economic Indicators Support the Australian Dollar (AUD)

On the data front, Australian Retail Sales in January increased by 1.1%, a bit lower than expected but a turnaround from the previous decline. Private Capital Expenditure in the fourth quarter of 2023 improved by 0.8%, surpassing expectations. However, Monthly Consumer Price Index (CPI) for January remained steady at 3.4%, slightly below what was anticipated. Construction Work Done also rose by 0.7% in the same quarter, slightly missing expectations. Meanwhile, ANZ-Roy Morgan Australian Consumer Confidence stayed nearly the same at 83.2, marking the 56th straight week below the 85 threshold, just a tad below the weekly average of 83.6 for 2024.

Hence, the positive impact on the AUD currency comes from the increase in Australian Retail Sales and Private Capital Expenditure, indicating economic resilience and potential growth. Despite the steady CPI and slight miss in Construction Work Done, the overall picture suggests underlying strength, which could boost confidence in the Australian economy and support the AUD.

US Dollar Strength and Economic Indicators Impacts on AUD/USD

On the US front, the broad-based US Dollar maintained its upward stance and holding steady, thanks to the higher US Treasury yields. The Federal Reserve is being careful about its next moves and they're talking about the possibility of cutting interest rates later this year, which could help keep the US dollar strong because the delaying rate cuts can be interpreted as a hawkish stance. This means the Fed is confident in the current economic conditions and may be less inclined to provide additional stimulus through rate reductions. This strengthened the US dollar and could cap further gains in the AUD/USD pair.

John Williams, who heads the New York Federal Reserve, says they might cut rates if inflation stays low, but they need to see more data first. Susan Collins, from the Boston Federal Reserve, agrees but wants to be sure before making any moves. Hence, the chances of a rate cut happening in March are pretty low, at just 3.0%, but they go up in May and June.

On the data front, the preliminary US Gross Domestic Product (GDP) for the fourth quarter of 2023 grew by 3.2%, slightly below expectations. The GDP Price Index increased by 1.7%, surpassing expectations. However, the US Housing Price Index rose by only 0.1% in December, lower than expected. Durable Goods Orders fell by 6.1%, worse than expected, while New Home Sales Change grew by 1.5%, below the previous increase. January's New Home Sales reached 0.661 million, missing expectations. These figures indicate mixed performance in the US economy, affecting market sentiments differently.

AUD/USD - Technical Analysis

On February 29, the AUD/USD pair showed modest progress, ascending by 0.18% to reach 0.65167. This slight uptick reflects a tempered optimism in the forex market, as traders digest various global economic indicators and policy decisions.

The currency pair is currently trading just below its pivot point of 0.65258, indicating a critical juncture that could determine the direction of its next move. Resistance levels are set at 0.65579, 0.65829, and 0.66088, marking potential hurdles that the AUD/USD must overcome to sustain its upward trajectory. Conversely, support levels at 0.64904, 0.64698, and 0.64425 provide a safety net, potentially cushioning any downward pressure and serving as key areas for buyers to re-enter the market.

Technical indicators provide further insight into the pair's dynamics. The Relative Strength Index (RSI) stands at 44, suggesting a slight lean towards oversold conditions without fully crossing the threshold, indicating that there might be room for downward movement or consolidation. The 50-day Exponential Moving Average (EMA) at 0.65336, slightly above the current price, signals a potential resistance area that could influence the pair's short-term trend.

Daily Price Outlook 

In the currency markets, the AUD/USD pair has seen a slight decline of 0.07%, positioning itself at 0.65263 as of February 27. Despite the dip, the Australian dollar exhibits resilience against the US dollar, with key technical indicators and price levels suggesting a nuanced outlook.

The pair hovers below the pivot point of 0.6559, a crucial level for traders monitoring potential shifts in momentum. Resistance levels are staged at 0.6599, 0.6637, and 0.6675, marking thresholds for bullish advances. Conversely, support levels at 0.6487, 0.6451, and 0.6417 delineate zones where buyers might emerge to uphold the pair's value.

Technical indicators shed light on the current market dynamics. The Relative Strength Index (RSI) at 45 suggests that the AUD/USD is neither overbought nor oversold, indicating a potential for either direction depending on market sentiment. The Moving Average Convergence Divergence (MACD) stands at -0.0004 with a signal of -0.0002, hinting at a narrowly bearish sentiment but with room for reversal. The 50-day Exponential Moving Average (EMA) at 0.6545 closely aligns with current prices, suggesting a consolidation phase.

An upward trendline on the 4-hourly chart and a bullish engulfing pattern around the 0.6525 level signal a sturdy support zone, bolstering the case for a potential uptick. Considering these factors, the technical outlook for AUD/USD leans towards cautious optimism.

AUD/USD - Trade Ideas

Entry Price – Buy Limit 0.65430

Take Profit – 0.65818

Stop Loss – 0.65166

Risk to Reward – 1: 1.4

Profit & Loss Per Standard Lot = +$388/ -$264

Profit & Loss Per Mini Lot = +$38/ -$26

Daily Price Outlook

Despite the risk-off market sentiment, the AUD/USD currency pair managed to stop its downward trend and attracted some bids around the $0.6545 level. However, the upward movement can be attributed to the release of the improved S&P/ASX 200 on Tuesday, which indicates that the stock market performance, particularly of the top 200 companies listed on the Australian Securities Exchange (ASX), has shown positive growth or gains.

Furthermore, the expected lifting of tariffs on Australian wine by China by the end of March is generally positive news for the Australian Dollar (AUD) as the removal of tariffs can boost Australian wine exports to China, improving trade relations and increasing demand for the Australian Dollar due to improved economic prospects and trade stability.

Moreover, the US dollar lost its momentum and started to decline, even though the Federal Reserve hinted at keeping interest rates high for longer. This change could be linked to the disappointing New Home Sales data and lower US Treasury bond yields. These factors helped the AUD/USD pair stay strong.

Impact of Australian Economic Data and Reserve Bank of Australia Policies on AUD Market Sentiment

On the data front, Australian Consumer Confidence remained nearly unchanged at 83.2, staying below the 85 mark for 56 weeks. However, the unchanged Consumer Confidence and potential rate cut by the Reserve Bank of Australia may weaken the AUD, but economic updates could change its direction. Nevertheless, the downbeat data is overshadowed by the improved S&P/ASX 200. This index reflects the performance of the top 200 companies listed on the stock market, suggesting positive market sentiment and potentially supporting the Australian Dollar's recovery.

Investors are keeping a close eye on two key economic indicators: the Consumer Price Index (CPI) and Retail Sales. Experts now think the Reserve Bank of Australia might cut interest rates by 0.25% in November, rather than August as previously thought.

Impact of Federal Reserve Statements and US Economic Data on AUD/USD pair

Moreover, the broad-based US dollar is struggling to bounce back but remains bearish amid lower US Treasury yields and previously released downbeat US home data. However, the losses in the US dollar could be temporary as the latest meeting minutes and statements from Federal Reserve officials indicate they're not rushing to lower interest rates.

On the data front, US New Home Sales Change (MoM) rose by 1.5% in January, lower than the previous growth of 7.2%. January's US New Home Sales (MoM) reached 0.661M, missing the expected 0.680M and the prior figure of 0.664M. The lower-than-expected growth in US New Home Sales and missing sales figures indicate potential weakness in the housing market, which could negatively impact the US Dollar.

Impact of Geopolitical Tensions and Economic Recession on AUD/USD Pair

In contrast to this, the risk-off market sentiment pressured by the ongoing tensions in the Middle East tends to undermine riskier assets like the AUD currency and could cap gains in the AUD/USD pair. On the other hand, the recession in Japan and the UK continues to hinder growth in the AUD/USD pair. Japan's GDP recorded an unexpected decline, following a significant contraction of 3.3% in the previous quarter. Furthermore, Japan's position as the world's third-largest economy was overtaken by Germany. The IMF foresees Germany surpassing Japan in economic size.

AUD/USD - Technical Analysis

In the currency markets, the AUD/USD pair has seen a slight decline of 0.07%, positioning itself at 0.65263 as of February 27. Despite the dip, the Australian dollar exhibits resilience against the US dollar, with key technical indicators and price levels suggesting a nuanced outlook.

The pair hovers below the pivot point of 0.6559, a crucial level for traders monitoring potential shifts in momentum. Resistance levels are staged at 0.6599, 0.6637, and 0.6675, marking thresholds for bullish advances. Conversely, support levels at 0.6487, 0.6451, and 0.6417 delineate zones where buyers might emerge to uphold the pair's value.

Technical indicators shed light on the current market dynamics. The Relative Strength Index (RSI) at 45 suggests that the AUD/USD is neither overbought nor oversold, indicating a potential for either direction depending on market sentiment. The Moving Average Convergence Divergence (MACD) stands at -0.0004 with a signal of -0.0002, hinting at a narrowly bearish sentiment but with room for reversal. The 50-day Exponential Moving Average (EMA) at 0.6545 closely aligns with current prices, suggesting a consolidation phase.

An upward trendline on the 4-hourly chart and a bullish engulfing pattern around the 0.6525 level signal a sturdy support zone, bolstering the case for a potential uptick. Considering these factors, the technical outlook for AUD/USD leans towards cautious optimism.

Daily Price Outlook 

In the recent trading session, the AUD/USD pair has shown modest growth, marking a 0.09% increase to reach 0.65578. This slight upward movement is indicative of a cautiously optimistic sentiment among traders, as the Australian dollar finds a gentle lift against its US counterpart. The 4-hour chart perspective offers a nuanced view into the currency pair's dynamics, as it maneuvers through the ebbs and flows of global economic indicators and policy decisions from central banks.

The pivot point for the AUD/USD pair is established at 0.65387, acting as a foundational marker for potential price direction. Resistance levels are seen at 0.65769, 0.66030, and 0.66253, outlining the hurdles that the pair might encounter on its upward journey. Conversely, support levels at 0.64968, 0.64772, and 0.64531 provide a safety net, potentially cushioning any downward movement and offering rebound opportunities.

The Relative Strength Index (RSI) stands at 56, suggesting a mildly bullish momentum without nearing overbought conditions, indicating that there may be room for further appreciation. The 50-day Exponential Moving Average (EMA) at 0.65326 further supports this view, as the current price is above this level, reinforcing the notion of a sustained upward trend in the near term.

Considering the alignment of technical indicators with key price levels, the AUD/USD currency pair presents a cautiously optimistic outlook. Traders might consider adopting a strategy that involves initiating long positions above 0.65626, aiming for a take profit target at 0.65978, while placing a stop loss at 0.65360 to mitigate potential risks. This strategic approach seeks to leverage the current bullish sentiment, aiming to capture gains from potential upward movements while employing prudent risk management.

AUD/USD - Trade Ideas

Entry Price – Buy Above 0.65626

Take Profit – 0.65978

Stop Loss – 0.65360

Risk to Reward – 1: 1.32

Profit & Loss Per Standard Lot = +$352/ -$266

Profit & Loss Per Mini Lot = +$35/ -$26

Daily Price Outlook

AUDUSD currency pair has been on a bullish trend and gaining traction continually above the 0.6583 level. It was supported by the risk-on market sentiment as well as the upbeat preliminary Australian Purchasing Managers Index (PMI) data, which typically strengthens the AUD by signaling economic growth and increased investor confidence. Furthermore, the broad-based US dollar bearish bias was seen as another key factor that helped the AUD/USD pair to stay bid.

Australian Economic Data and Potential Effects on the AUD/USD Pair

At the data front, Australia's Judo Bank Composite PMI rose to 51.8 in February, indicating growth in the private sector after five months of decline. In the meantime, the Services PMI also improved to 52.8, signaling a positive trend. Conversely, the Manufacturing PMI dropped to 47.7 due to a fall in new orders. Meanwhile, the Wage Price Index increased by 0.9% in Q4, slightly lower than expected. Moreover, the ANZ-Roy Morgan Consumer Confidence edged up but remains below the 85 mark for 55 weeks. However, the RBA's Meeting Minutes discussed the possibility of a rate hike but agreed to wait due to the gradual nature of inflation's return to target levels.

Therefore, the mixed data could lead to mixed impacts on the AUD/USD pair. Positive PMI figures may support the AUD, but lower Manufacturing PMI and a cautious RBA stance could limit gains.

US Economic Indicators and Their Potential Impact on the AUD/USD Pair

At the US front, the FOMC Minutes hinted at holding off on rate cuts, which influencing the market sentiment. Despite rising Treasury yields, the US Dollar faced bearish pressure as traders awaiting various business activity surveys to assess the global economic health. Market expectations suggest a 70% chance of a rate cut by June, with a 52.2% probability of easing starting then. Meanwhile, Richmond Fed President Barkin sees progress in inflation and employment but notes challenges with recent PPI and CPI figures, indicating lingering disinflation issues.

Therefore, the mixed signals from the US, with hints of delayed rate cuts and inflation concerns, impacted the AUD/USD pair.

AUD/USD - Technical Analysis

In the recent trading session, the AUD/USD pair has shown modest growth, marking a 0.09% increase to reach 0.65578. This slight upward movement is indicative of a cautiously optimistic sentiment among traders, as the Australian dollar finds a gentle lift against its US counterpart. The 4-hour chart perspective offers a nuanced view into the currency pair's dynamics, as it maneuvers through the ebbs and flows of global economic indicators and policy decisions from central banks.

The pivot point for the AUD/USD pair is established at 0.65387, acting as a foundational marker for potential price direction. Resistance levels are seen at 0.65769, 0.66030, and 0.66253, outlining the hurdles that the pair might encounter on its upward journey. Conversely, support levels at 0.64968, 0.64772, and 0.64531 provide a safety net, potentially cushioning any downward movement and offering rebound opportunities.

The Relative Strength Index (RSI) stands at 56, suggesting a mildly bullish momentum without nearing overbought conditions, indicating that there may be room for further appreciation. The 50-day Exponential Moving Average (EMA) at 0.65326 further supports this view, as the current price is above this level, reinforcing the notion of a sustained upward trend in the near term.

Considering the alignment of technical indicators with key price levels, the AUD/USD currency pair presents a cautiously optimistic outlook. Traders might consider adopting a strategy that involves initiating long positions above 0.65626, aiming for a take profit target at 0.65978, while placing a stop loss at 0.65360 to mitigate potential risks. This strategic approach seeks to leverage the current bullish sentiment, aiming to capture gains from potential upward movements while employing prudent risk management.

Daily Price Outlook 

The AUD/USD pair observed a slight decline in its value, registering a 0.14% decrease to position itself at 0.65285. This movement reflects a cautious sentiment prevailing in the forex market, with the Australian dollar facing resistance against its American counterpart. The pivot point for this currency pair is established at $0.6544, serving as a crucial juncture that could dictate the direction of subsequent movements.

Key resistance levels are identified at $0.6577, $0.6603, and $0.6625, marking potential barriers the AUD/USD must overcome to signal a bullish trend. Conversely, support levels are positioned at $0.6497, $0.6477, and $0.6453, which could offer a safety net against further declines. The Relative Strength Index (RSI) stands at 53, indicating a relatively balanced market dynamic between buyers and sellers, yet leaning slightly towards a bearish bias.

The 50-Day Exponential Moving Average (EMA) at 0.6519 underscores a critical support level, suggesting that the AUD/USD pair is navigating close to its short-term trend indicator. The technical outlook suggests a nuanced approach to trading this pair, recommending a sell strategy below the pivot point of 0.65427, with a target take profit at 0.64981 and a stop loss set at 0.65667. This strategy reflects a tactical response to the pair's current stance, aiming to capitalize on potential downward movements while mitigating risk.

AUD/USD - Trade Ideas

Entry Price – Sell Below 0.65427

Take Profit – 0.64981

Stop Loss – 0.65667

Risk to Reward – 1: 1.8

Profit & Loss Per Standard Lot = +$446/ -$240

Profit & Loss Per Mini Lot = +$44/ -$24

Daily Price Outlook

During the early European session, the AUD/USD currency pair was unable to stop its previous session's losing streak and remained under pressure around 0.6530. However, the bearish bias could be attributed to the bullish US dollar, which has been gaining momentum for the fifth consecutive week, backed by upbeat US data, including strong inflation figures released earlier. Therefore, the bullish trend in the US dollar has exerted pressure on the AUD/USD pair.

Although, the gains in the US dollar could be faded by recent dovish comments from Fed officials, such as San Francisco Fed President Mary C. Daly and St. Louis Fed President James Bullard, which could help the AUD/USD pair to limit its losses. Furthermore, the previously released downbeat data on Australia's ASX 200 index was seen as another key factor adding pressure to the AUD/USD pair.

Aussie Money Market Weakness and RBA Caution Impact on AUD/USD Pair

Apart from this, the weaker Aussie money market has also played a major role in undermining the AUD/USD pair. Moreover, the S&P/ASX 200 index recently ended its upward trend, mainly due to declines in mining and energy stocks caused by lower commodity prices. It is worth noting that the Reserve Bank of Australia (RBA) discussed the option of raising rates by 0.25% or leaving them unchanged in their February meeting. Although they're more confident about inflation improving, they believe it'll still take some time.

Hence, the weaker Aussie money market, along with declining commodity prices and cautious RBA sentiments, has contributed to undermining the AUD/USD pair.

US Dollar Strength and Federal Reserve's Policy Uncertainty's Impact on AUD/USD Pair

Another factor pressuring the AUD/USD pair is the strong US dollar. Despite the dovish stance by the Federal Reserve, the US dollar has been gaining momentum, with the Federal Reserve suggesting possible rate cuts. San Francisco Fed President Daly mentioned three cuts as a baseline for 2024. However, the upward trend in the US dollar can be attributed to the upbeat US data, which includes strong inflation data.

On the data front, the Michigan Consumer Sentiment Index rose slightly to 79.6, just below the expected 80.0. The US Core Producer Price Index increased by 2% year-over-year in January, beating expectations. However, Building Permits decreased to 1.470 million, missing the anticipated rise.

Hence, the positive impact on the dollar could come from the better-than-expected increase in the US Core Producer Price Index, which suggests potential inflationary pressures, viewed as beneficial for the dollar and bearish for the AUD/USD pair.

On the other side, the Federal Reserve forecasts a cut of 75 basis points in interest rates for this year, whereas market futures anticipate approximately 89 basis points in cuts. San Francisco Fed President Mary C. Daly advocates for a three-time interest rate cut in 2024 to avoid leaving the economy unattended. Meanwhile, St. Louis Fed President James Bullard recommends a rate reduction in March to bolster economic activity. Hence, the mixed signals on rate cuts and the suggestion for further easing from Fed officials could negatively impact the US dollar, reflecting uncertainty and potential weakness in the economy.

People's Bank of China's Policy Decisions Impact on AUD/USD Pair

On the positive side, the People's Bank of China (PBoC) maintained the one-year Loan Prime Rate (LPR) at 3.45% and reduced the five-year LPR by 25 basis points to 3.95%. Additionally, the PBoC kept the Medium-term Lending Facility (MLF) rate steady at 2.5%. Hence, the PBoC's actions will likely positively influence the AUD/USD pair, as they signal efforts to stimulate the Chinese economy with lower rates, potentially boosting demand for Australian exports and strengthening the Australian dollar against the US dollar.

AUD/USD - Technical Analysis

The AUD/USD pair observed a slight decline in its value, registering a 0.14% decrease to position itself at 0.65285. This movement reflects a cautious sentiment prevailing in the forex market, with the Australian dollar facing resistance against its American counterpart. The pivot point for this currency pair is established at $0.6544, serving as a crucial juncture that could dictate the direction of subsequent movements.

Key resistance levels are identified at $0.6577, $0.6603, and $0.6625, marking potential barriers the AUD/USD must overcome to signal a bullish trend. Conversely, support levels are positioned at $0.6497, $0.6477, and $0.6453, which could offer a safety net against further declines. The Relative Strength Index (RSI) stands at 53, indicating a relatively balanced market dynamic between buyers and sellers, yet leaning slightly towards a bearish bias.

The 50-Day Exponential Moving Average (EMA) at 0.6519 underscores a critical support level, suggesting that the AUD/USD pair is navigating close to its short-term trend indicator. The technical outlook suggests a nuanced approach to trading this pair, recommending a sell strategy below the pivot point of 0.65427, with a target take profit at 0.64981 and a stop loss set at 0.65667. This strategy reflects a tactical response to the pair's current stance, aiming to capitalize on potential downward movements while mitigating risk.