AUD/USD Price Analysis – April 11, 2023
Daily Price Outlook
The AUDUSD pair has decisively broken the 0.6665 level and settled below it, suggesting potential negative pressure in the upcoming sessions. However, the price has started today with noticeable positivity, testing the mentioned level due to the positive momentum from the stochastic indicator, indicating an attempt to resume the bullish trend.
As a result, it is preferable to remain on the sidelines until the price confirms its position concerning the 0.6665 level. It is important to note that maintaining below this level will primarily put pressure on the price to decline towards 0.6550, while surpassing it will be the key to initiating a new bullish wave with initial targets at 0.6780.
Today's expected trading range is between 0.6600 support and 0.6720 resistance.
AUD/USD Trade Idea
Entry Price – Sell Below 0.6675
Stop Loss – 0.6710
Take Profit – 0.6619
Risk to Reward – 1 : 1.60
Profit & Loss Per Standard Lot = +$550/ -$340
Profit & Loss Per Micro Lot = +$55/ -$34
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* GOLD Price Analysis – April 11, 2023
AUD/USD Price Analysis – April 06, 2023
Daily Price Outlook
As the market anticipates Australian foreign trade data for February and China's Caixin Services PMI for March early on Thursday, the AUD/USD is picking up bids to counterbalance recent losses around 0.6720.
Despite weaker US data, the Australian dollar declined over the past two days, with bulls being restrained even as Reserve Bank of Australia (RBA) Governor Philip Lowe made efforts to revive them.
Governor Philip Lowe of the RBA took action to appease hawks on Wednesday, following the central bank's delay in raising interest rates. The policymaker did not consider a rate cut and indicated that the balance of risks leans towards further rate hikes.
US-China Tensions Over Taiwan Add Pressure to AUD/USD Price
However, the US Dollar managed to recover and disregard the negative data amid recession concerns. Notably, the ADP Employment Change for March fell to 145K, missing the 200K forecast and down from a revised 261K prior.
Both the final S&P Global Composite and Services PMIs for March displayed disappointing results, with the former declining to 52.3 from 53.3 preliminary estimates, and the latter dropping to 52.6 from 53.8 initial projections.
More importantly, the US ISM Services PMI for the same month heightened pessimism as it plunged to 51.2, well below the 54.5 forecast and 55.1 prior.
Weaker US Statistics Ignored as US Dollar Regains Strength
The recent US-China dispute over Taiwan also exerts pressure on the AUD/USD price due to the close ties between Australia and China, in addition to the US Dollar's rally and RBA meetings and actions.
Escalating US Recession Concerns Impact Market Mood and Treasury Bond Yields
In this context, US recession concerns have intensified, negatively impacting market sentiment. The gloomy Wall Street performance also dragged down US Treasury bond yields. However, thanks to the negative sentiment, the US Dollar Index (DXY) managed to bounce back from a two-month low and halt a two-day downtrend.
AUD/USD – Technical Outlook
The AUDUSD pair's decline halted near the 0.6665 level, and the price has started to recover in an attempt to resume the intraday bullish wave, with an initial target of 0.6780.
The EMA50 is attempting to prevent the price from incurring further losses, supporting the continuation of the projected positive scenario. However, it is important to note that breaking through the 0.6665 level could halt the anticipated rise and push the price to visit the next correctional level at 0.6550.
Today's likely trading range is between 0.6650 support and 0.6770 resistance.
Related:
* GOLD Price Analysis – April 06, 2023
AUD/USD Price Analysis – April 05, 2023
Daily Price Outlook
Early Wednesday, AUD/USD bears took a break around mid-0.6700s, as traders awaited a speech from Reserve Bank of Australia (RBA) Governor Philip Lowe. The RBA paused its rate hike trajectory and satisfied sellers the previous day by maintaining its current monetary policy with a benchmark rate of 3.60%. The Australian central bank attributed the recent decline in Australian inflation and retail sales data to justify the status quo while also acknowledging the possibility of further monetary tightening.
Russian Foreign Minister Raises Fears of Escalating Moscow-Brussels Tussle
Meanwhile, the US dollar's reserve currency status has been challenged, contributing to a risk-on mood in the market. Bloomberg reported that the Chinese yuan surpassed the US dollar as the most traded currency in Russia in February, with the gap continuing to widen in March. Brazil and China also agreed to pause the US dollar's usage as an intermediary in trade transactions. Furthermore, Russian Foreign Minister Sergei Lavrov raised concerns about escalating tensions with Brussels and indicated that Moscow would deal with Europe more harshly if necessary.
US-China Tension Continues as Beijing Criticizes Meeting Between Taiwan President and US House Speaker
The ongoing US-China tension remains a topic of discussion as well. On Tuesday, Taiwan President Tsai Ing-wen met with US House Speaker Kevin McCarthy, which drew criticism from China's Consulate General in Los Angeles.
AUD/USD Intraday Technical Levels
Support Resistance
0.6678 0.6742
0.6640 0.6768
0.6614 0.6806
Pivot Point: 0.6704
AUD/USD – Technical Outlook
The AUDUSD pair encounters strong resistance at the 0.6780 level, currently displaying a bearish bias due to the negative impact of stochastic indicators, while awaiting positive momentum to help the price break through the aforementioned level and confirm its trajectory towards 0.6920 as the next target.
Consequently, our bullish outlook for today is contingent upon the price remaining stable above 0.6735, as breaking this level will exert pressure on the price to test the 0.6665 region before attempting another rise.
Today's expected trading range lies between the 0.6720 support and 0.6850 resistance levels.
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* GOLD Price Analysis – April 05, 2023
AUD/USD Price Analysis – March 21, 2023
Daily Price Outlook
The AUD/USD is currently trading at 0.6685, having fallen by 0.49% in the last 24 hours. The currency pair experienced a drop following the release of the Reserve Bank's March meeting minutes, which revealed that officials were considering pausing interest rate increases in light of decreasing inflation and economic pressures.
RBA Minutes and AUD/USD
The Reserve Bank of Australia (RBA) released the minutes of its March monetary policy meeting early on Tuesday morning. During the meeting, the board discussed the need to potentially pause the cycle of rate increases, but also noted that Australia's inflation remained high, the labor market was tight, and wage growth had picked up.
However, RBA officials only considered the possibility of a 25 basis point (bps) increase in rates, despite recent inflation in the Australian economy.
The minutes also revealed that policymakers were concerned about the potential for fluctuations in the monthly Consumer Price Index (CPI), which slowed from its peak of 8.4% in December.
Despite this, the RBA has not yet reached its target range for inflation and may continue to hike rates soon. However, the RBA minutes were less hawkish than expected, which led to a drop in the AUD/USD currency pair.
FOMC meeting in focus
On Tuesday, the US Dollar Index (DXY) is up by 0.12% at 103.40, following the state-backed purchase of Credit Suisse by UBS, which eased concerns about a global banking crisis. As traders cautiously move back into riskier assets, the dollar has regained some ground.
The decision of the Federal Reserve on Wednesday is the most significant market event this week. The market expects that the Fed will not raise interest rates by more than 25 basis points (bps), as their priority is to restore investors' confidence. Therefore, the dollar is struggling to maintain its upward trend in recovery.
CME Group's FedWatch tool shows that as of Tuesday, there is a roughly 75.3% chance of a 25 bps hike by the Fed. However, the remaining 24.7% are against rate hikes and believe that Chairman Jerome Powell should halt his hawkish tightening campaign in light of the rising bank failure.
If the Fed decides to keep interest rates steady to prevent the effects of rising banking stress, it could benefit the AUD/USD.
AUD/USD Intraday Technical Levels
Support Resistance
0.6678 0.6742
0.6640 0.6768
0.6614 0.6806
Pivot Point: 0.6704
AUD/USD – Technical Outlook
The AUD/USD pair is currently trading bearishly below the 0.6665 level and is approaching its second target at 0.6550. It is moving within a bearish channel, increasing the chances of further bearish corrections, with a possible decline towards 0.6400.
The bearish trend is being supported by the EMA50, and negative momentum may be required to break through and reach the expected target.
However, if the pair manages to surpass the 0.6665 level, it could prevent the anticipated decline and initiate recovery attempts, targeting 0.6780 initially. The expected trading range for the day is between the support level of 0.6500 and the resistance level of 0.6620.
Related:
* BTC/USD Price Analysis – March 21, 2023
AUD/USD Price Analysis – March 14, 2023
Daily Price Outlook
The AUD/USD pair is currently trading at 0.6637, down by 0.41% within the last 24 hours. The pair has trended lower due to the USD's increased value in anticipation of the US CPI.
Westpac Consumer Sentiment
A private survey released on Tuesday revealed that consumer confidence in Australia remained unchanged from the previous month in early March. Despite this, confidence levels continued to hover around COVID-era lows due to the country's struggle with high inflation and increasing interest rates.
The Westpac-Melbourne Institute Consumer Sentiment index remained constant at 78.5 in March, as per a report from Westpac. While this level was still near its lowest point since March 2020, the bank noted that it was uncommon to have two consecutive months of low consumer confidence, indicating rising concerns about inflation among the general public.
In addition, consumers in Australia are expecting further interest rate hikes by the Reserve Bank of Australia (RBA), which has already had a negative impact on the country's economy. RBA Governor Philip Lowe has indicated that the bank may pause its rate hikes as early as April if inflationary pressures ease, but some experts predict that the bank will continue to raise rates until May.
The Australian dollar initially declined as investors anticipated a slowdown in the pace of future rate hikes, but if the RBA follows through with raising rates until May, it could ultimately benefit the AUD/USD pair.
US Dollar Rebounded Ahead of US CPI
On Sunday, the Federal Reserve developed a contingency plan to mitigate the damage to the US banking system caused by Silicon Valley Bank's (SVB) collapse, reducing market risk.
Traders are eagerly anticipating the US Consumer Price Index (CPI) report on Tuesday, with some market experts revising their expectations for a 50 basis point (bps) rate hike by the Fed on March 22.
As a result, the dollar is strengthening, with the US Dollar Index (DXY) trading at 103.89, a 0.28% increase in the last 24 hours. The yield on US 10-Year Bonds has also risen to 3.564%.
A continuously rising interest rate may weaken the banking system, and high inflation rates pose a double challenge for central banks. As a result, the upcoming US Consumer Price Index (CPI) will be crucial to observe since it will further complicate the Federal Reserve's position.
Traders expect a decrease in the US CPI, which could lead to a reversal of the Fed's aggressive stance and a potential increase in the AUD/USD price.
AUD/USD Intraday Technical Levels
Support Resistance
0.6590 0.6727
0.6517 0.6791
0.6453 0.6864
Pivot Points:0.6654
AUD/USD – Technical Outlook
The AUD/USD pair has fallen below the 0.6665 level and is currently bearish, heading towards the second target of 0.6550. It is currently trading within a bearish channel, increasing the likelihood of further bearish corrections, and a potential decline towards 0.6400.
The bearish wave continues to be supported by the EMA50, and a negative momentum may be necessary to break through and reach the expected target.
However, if the pair manages to surpass the 0.6665 level, it could prevent the anticipated decline and initiate recovery attempts, with an initial target of 0.6780. The expected trading range for the day is between the support level of 0.6500 and the resistance level of 0.6620.
AUD/USD Price Analysis – March 08, 2023
Daily Price Outlook
The AUD/USD currency pair has been unable to halt its downward trend and remains offered at the 0.6600 level. It is under significant selling pressure and has dropped to its lowest point since late December, currently trading at 0.6568. There is a possibility of further declines as RBA Governor Lowe considers a break in the policy-tightening cycle.
Additionally, the AUD/USD currency pair has been under pressure due to hawkish remarks made by Federal Reserve (Fed) Chair Jerome Powell. Powell stated that strong economic data will most likely lead to higher interest rates than previously anticipated to combat inflation.
On the other hand, the Reserve Bank of Australia's (RBA) policy statement was dovish, combined with the continued upward trend of the US Dollar, putting significant pressure on the AUD/USD pair. As a result, the Australian Dollar is currently the worst-performing G10 currency.
Feds Hawkish Stance & Bullish US Dollar
Federal Reserve Chairman Jerome Powell has indicated that strong economic data will likely lead to higher interest rates to curb inflation. As a result, the market-implied probability of a 50 basis point rate hike in March has increased from 30% to 50%, according to CME Group's interest-rate futures.
Market participants expect the Federal Reserve to maintain its hawkish stance and raise interest rates for a longer period to combat persistent inflation. This is contributing to a strongly offered tone around the AUD/USD pair.
Additionally, the US dollar has risen to a three-month high against a basket of currencies, with both the dollar index and dollar index futures climbing around 0.2%, reaching their highest levels since early December.
Reopening of Chinese Economy
RBA Governor Lowe stated that the reopening of the Chinese economy is expected to have a positive impact on the Australian economy. This is due to the fact that China is one of Australia's largest trading partners, and a boost in Chinese economic activity can result in increased demand for Australian exports, such as natural gas, coal, and iron ore.
This statement was seen as a positive development that could help the AUD/USD pair recover some of its strength.
AUD/USD Intraday Technical Levels
Support Resistance
0.6708 0.6762
0.6686 0.6792
0.6655 0.6815
Pivot Point: 0.6739
AUD/USD – Technical Outlook
The AUD/USD pair has broken below the 0.6665 level and is currently trading bearishly toward the second target of 0.6550. It is moving within a bearish channel, which increases the chances of further bearish correction and a potential decline toward 0.6400.
The EMA50 continues to provide support for the bearish wave, and negative momentum may be required to achieve the necessary break and reach the expected target.
However, if the pair manages to breach the 0.6665 level, it could stop the expected decline and initiate recovery attempts, with an initial target of 0.6780. The expected trading range for today is between 0.6500 support and 0.6620 resistance.
AUD/USD Price Analysis – March 07, 2023
Daily Price Outlook
The AUD/USD is trading at 0.6713, having declined by 0.21% in the last 24 hours. The pair suffered significant losses due to China's failure to meet its GDP target and the Reserve Bank of Australia's rate announcement.
China disappointing GDP target
Over the weekend, the Chinese government announced a 5% GDP target for 2023, which is lower than the previous year's target of 5.5%. This figure was below market expectations and indicated Beijing's relatively cautious approach toward an economic recovery this year.
Despite business activity expanding at its highest rate in almost a decade in February after the removal of anti-COVID restrictions, the lower GDP target dampened hopes for a Chinese economic revival.
In addition, currencies that are sensitive to the Chinese economy, such as the Australian dollar, fell after the disappointing GDP target announcement.
RBA Rate Statement
On Tuesday, the Reserve Bank of Australia (RBA) raised interest rates, as expected, to control inflation, reaching a 10-year high. The RBA raised the cash rate target by 25 basis points to 3.60%, and it also increased the interest rate on Exchange Settlement balances by 25 basis points to 3.50%.
RBA Governor Philip Lowe stated that Australia's inflation had likely peaked and was expected to moderate in the coming months. He added that the RBA would continue to follow a data-driven approach for future rate hikes. However, he warned that the Australian economy's path to a soft landing is narrow.
Although the RBA's decision to raise the benchmark interest rate was in line with market expectations, the lack of any hawkish surprise appears to have weighed on the AUD. As a result, the Australian dollar experienced a significant decline.
Powell testimony approaches
Today during the US session, Powell is scheduled to speak before Congress and provide insight into the timeline for the direction of interest rates. However, market participants are uncertain what tone the Fed Chair will take, given that while inflation unexpectedly jumped in January, other economic data showed that the US economy was slowing down.
If Powell takes a more hawkish stance, it will improve expectations for US interest rate action and support the Dollar. Currently, DXY is trading lower at around 104.23.
The nonfarm payrolls report for February, which will be released on Friday, is also a key focus this week. Further indications of job market strength would give the Fed more flexibility to raise rates.
AUD/USD Intraday Technical Levels
Support Resistance
0.6708 0.6762
0.6686 0.6792
0.6655 0.6815
Pivot Point: 0.6739
AUD/USD – Technical Outlook
The AUD/USD pair has been trading sideways recently, with its stability remaining below 0.6780. It is still moving within a bearish channel on the chart, supporting our view and targeting the next level of 0.6665.
The EMA50 is also supporting this bearish trend. However, if the pair manages to break above 0.6780, it could stop the current bearish correction and lead to an attempt to regain the primary bullish trend.
The expected trading range for today is between 0.6670 support and 0.6780 resistance.
AUD/USD Price Analysis – March 03, 2023
Daily Price Outlook
The AUD/USD pair is trading at $0.6743, representing an increase of 0.21% in the past 24 hours. Traders are closely analyzing the comments made by Federal Reserve officials while also waiting for China's upcoming legislative meeting to gauge the level of economic support that could be expected. Despite these factors, the Australian dollar has remained steady.
Chinese Economy and Its Impact on AUD/USD
The Chinese economy is making significant progress toward economic recovery after lifting Covid restrictions. The government and the People's Bank of China (PBoC) are committed to boosting domestic demand by implementing further stimulus and reform initiatives.
In addition, according to a report by S&P Global released on Friday, China's services sector experienced growth in February due to increasing demand. The report indicates that the Caixin Services PMI rose from 52.9 in January to 55.0 in February, showing a consecutive month-over-month improvement in activity.
It is worth noting that Australia is China's top trading partner, and an increase in China's service PMI benefits the Australian Dollar.
All eyes are now on China's annual parliamentary session, which is set to take place on Sunday. Beijing will announce new policy measures to support economic growth and targets.
RBA's Interest Rate Guidance
Despite a recent decline in Australia's Consumer Price Index (CPI), the Reserve Bank of Australia (RBA) remains steadfast in its hawkish outlook. RBA policymakers have not indicated that Australian inflation has peaked so the central bank will maintain a hawkish position.
A recent Reuters survey on the RBA's interest rate guidance reveals that the central bank is expected to increase its interest rate by 25 basis points (bps) to 3.60% on Tuesday, March 7.
The survey predicts that the RBA will increase its interest rate again in Q2 before pausing until next year, resulting in a higher peak rate than anticipated. Further rate hikes may support the Australian Dollar (AUD).
Dollar Under Pressure
On Thursday, Raphael Bostic, the president of the Atlanta Federal Bank, suggested that the current tightening cycle by the Federal Reserve could end by mid-summer. While he supports a 25 basis point rate hike in March, he is open to reconsidering a more hawkish outlook if inflation and labor market figures show improvement.
Bostic's comments have pressured the US Dollar Index (DXY), currently trading at 104.89. Later today, the US Institute of Supply Management (ISM) will release data on the Services PMI (Feb), potentially supporting the US Dollar.
AUD/USD Intraday Technical Levels
Support Resistance
0.6700 0.6762
0.6672 0.6796
0.6639 0.6824
Pivot Point: 0.6734
AUD/USD – Technical Outlook
Yesterday, the AUDUSD pair traded negatively and approached the 0.6700 level. There is some bullish bias in the market due to stochastic positivity. The following support level is at 0.6665, and the pair must remain below 0.6780 to continue the projected downtrend.
The EMA50 is still supporting the bearish wave within the negative channel. Today, the trading range is expected to be between the support level of 0.6670 and the resistance level of 0.6780.