AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD is trading around key pivot at $0.66985 with neutral momentum.
- The 50 EMA at $0.66883 acts as dynamic support, keeping the pair in balance.
- RSI at 52 indicates indecision, with potential for shifts in momentum either way.
The Australian dollar is showing a modest uptick against the U.S. dollar, with the AUD/USD pair currently trading at $0.66875, up 0.44% on the day. On the 4-hour chart, the pair remains near key pivot levels, indicating potential for both upside and downside movement depending on upcoming economic data and market sentiment. The immediate pivot point stands at $0.66985, with the pair's direction largely dictated by price action around this level.
Immediate resistance lies at $0.67233, and if breached, could lead to further upside with targets at $0.67454 and $0.67688. On the flip side, should bearish momentum take over, the price could slip toward immediate support at $0.66687, followed by $0.66512 and $0.66302. The 50-day Exponential Moving Average (EMA), which is currently positioned at $0.66883, serves as a dynamic support level and will play a critical role in determining near-term direction.
The Relative Strength Index (RSI) is currently at 52, indicating neutral momentum, suggesting that neither buyers nor sellers have a strong grip on the market at present. With the RSI hovering around the mid-point, traders should watch for potential shifts in sentiment based on global risk factors and U.S. dollar dynamics.
In conclusion, the current price action suggests a possible short-term bearish bias if the price slips below $0.66982. A sell entry below this level with a target of $0.66681 and a stop-loss at $0.67158 may provide favorable risk-reward opportunities. However, upside potential remains viable if resistance levels are tested.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.66982
Take Profit – 0.66681
Stop Loss – 0.67158
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$301/ -$262
Profit & Loss Per Mini Lot = +$41/ -$26
AUD/USD Price Analysis – Oct 17, 2024
Daily Price Outlook
The AUD/USD currency pair reversed its three-day bearish streak, climbing to an intra-day high of 0.6711. This upward movement followed the release of a robust Australian employment report on Thursday, which revealed a seasonally adjusted Employment Change of 64.1K in September. This figure significantly exceeded market expectations of a 25.0K increase and brought total employment in Australia to a record 14.52 million, following a revised rise of 42.6K in the previous month.
Meanwhile, the US dollar gained strength from solid labor and inflation data, which has tempered expectations for aggressive easing by the Federal Reserve (Fed). Consequently, the bullish outlook for the USD may limit further gains for the AUD/USD pair.
Australian Dollar Strengthens on Employment Report Amid Weak Consumer Confidence
On the AUD front, the Australian Dollar (AUD) ended its three-day losing streak against the US Dollar (USD) after a strong employment report was released. In September, Australia saw a surge of 64.1K in seasonally adjusted Employment Change, bringing total employment to a record 14.52 million. This was well above the market expectation of a 25.0K increase and followed a revised gain of 42.6K in the previous month. The unemployment rate held steady at 4.1%, which was better than the anticipated 4.2%.
Despite these positive employment figures, consumer confidence in Australia showed little improvement. The ANZ-Roy Morgan Consumer Confidence index remained unchanged at 83.4 this week, continuing a trend of being below 85.0 for 89 consecutive weeks. Although this week’s reading was slightly higher than the 2024 weekly average of 82.1, overall consumer sentiment remains weak.
Looking ahead, the Commonwealth Bank of Australia predicts a 25 basis point rate cut by the Reserve Bank of Australia (RBA) by the end of 2024. This expectation hinges on a stronger disinflationary trend than the RBA currently anticipates. Meanwhile, in China, the Consumer Price Index (CPI) remained unchanged at 0% in September, and the Producer Price Index (PPI) dropped by 2.8% year-on-year, both indicating economic pressures that could influence Australia's economic outlook.
Impact of US Economic Strength on AUD/USD Dynamics
On the US front, the US dollar gained strength from solid labor and inflation data, reducing expectations for aggressive interest rate cuts by the Federal Reserve (Fed). According to the CME FedWatch Tool, there is now a 92.1% chance of a 25-basis-point rate cut in November, but markets do not expect a larger 50-basis-point reduction. This sentiment reflects a cautious approach to monetary policy.
On Tuesday, Raphael Bostic, the President of the Federal Reserve Bank of Atlanta, shared his view that he anticipates only one more interest rate cut of 25 basis points this year. He mentioned that during last month’s central bank meeting, the median forecast indicated a potential for 50 basis points of cuts in addition to the 50 basis points already implemented in September. Bostic's projection aligns with a more measured approach to adjusting rates.
In addition to this, Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, reassured markets by emphasizing the Fed's data-driven strategy. He noted the strength of the US economy and the ongoing easing of inflationary pressures, despite a recent slight increase in the overall unemployment rate. This perspective supports a stable outlook for the dollar as the Fed evaluates future policy moves.
Therefore, the strengthening USD, driven by solid labor data and tempered rate cut expectations, may limit gains for the AUD/USD pair. As the Fed adopts a cautious monetary stance, the Australian Dollar could face downward pressure against the stronger US Dollar.
AUD/USD – Technical Analysis
The AUD/USD pair is trading at $0.66843, up 0.35% for the day, as it hovers below the key pivot point of $0.6704. The immediate resistance at $0.6732 is crucial; a break above this level could lead to further gains toward the next resistance levels of $0.6758 and $0.6781. However, with the price currently below the 50-day Exponential Moving Average (EMA) at $0.6711, there is potential for bearish momentum to reassert itself.
On the downside, immediate support lies at $0.6662, with further support levels at $0.6639 and $0.6617. The RSI is currently at 45, indicating a neutral market sentiment but leaning toward bearish territory as it remains below the midpoint. This suggests that further downward pressure could build if the pair fails to break above the pivot point.
Traders should be cautious of the 50-day EMA as it represents a critical barrier for any bullish attempts. A move below the immediate support at $0.6662 could trigger selling pressure, potentially driving the price toward $0.6639. The pivot point at $0.6704 will be a key indicator for future direction, with selling opportunities emerging below this level.
Given the current technical setup, a short position could be considered if the price remains below $0.6704. Traders could target $0.66603 for profit, while placing a stop-loss at $0.67256 to manage risk in case of a bullish breakout.
Related News
- GOLD Price Analysis – Oct 17, 2024
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD faces key resistance at $0.6732, with potential gains if it breaks higher.
- The 50-day EMA at $0.6711 serves as a critical level, suggesting a bearish bias.
- RSI at 45 indicates neutral sentiment, with a slight lean toward further downside.
The AUD/USD pair is trading at $0.66843, up 0.35% for the day, as it hovers below the key pivot point of $0.6704. The immediate resistance at $0.6732 is crucial; a break above this level could lead to further gains toward the next resistance levels of $0.6758 and $0.6781.
However, with the price currently below the 50-day Exponential Moving Average (EMA) at $0.6711, there is potential for bearish momentum to reassert itself.
On the downside, immediate support lies at $0.6662, with further support levels at $0.6639 and $0.6617. The RSI is currently at 45, indicating a neutral market sentiment but leaning toward bearish territory as it remains below the midpoint.
This suggests that further downward pressure could build if the pair fails to break above the pivot point.
Traders should be cautious of the 50-day EMA as it represents a critical barrier for any bullish attempts. A move below the immediate support at $0.6662 could trigger selling pressure, potentially driving the price toward $0.6639.
The pivot point at $0.6704 will be a key indicator for future direction, with selling opportunities emerging below this level.
Given the current technical setup, a short position could be considered if the price remains below $0.6704. Traders could target $0.66603 for profit, while placing a stop-loss at $0.67256 to manage risk in case of a bullish breakout.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.67036
Take Profit – 0.66603
Stop Loss – 0.67256
Risk to Reward – 1: 1.9
Profit & Loss Per Standard Lot = +$433/ -$220
Profit & Loss Per Mini Lot = +$43/ -$22
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate resistance at $0.67576, with potential upside capped at $0.67810 if bullish momentum strengthens.
- Immediate support is at $0.67025, with downside risk toward $0.66828 if selling pressure intensifies.
- RSI at 41 indicates bearish momentum, with further declines likely if the pair fails to hold above support levels.
AUD/USD is currently trading at $0.67130, down 0.19%, as the pair experiences selling pressure following its failure to break key resistance levels. The pivot point stands at $0.67304, with immediate resistance at $0.67576. A move above this could push the pair towards the next resistance levels at $0.67810 and $0.68105. However, current market sentiment appears bearish, suggesting that any rally may struggle to gain traction.
On the downside, immediate support is seen at $0.67025, with deeper support at $0.66828 and $0.66615. If AUD/USD breaks below these levels, it could signal further downside movement. The 50-day EMA at $0.67292 is trending just above current prices, indicating potential resistance on the path to recovery.
The RSI currently sits at 41, suggesting that the pair is in bearish territory. Momentum is skewed to the downside, indicating increased selling pressure. A break below the pivot point at $0.67304 may confirm further declines, with bears likely to target support at $0.66828.
Given the bearish technical signals, traders may consider short positions below $0.67304, with a take-profit target of $0.66908 and a stop-loss at $0.67522.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.67304
Take Profit – 0.66908
Stop Loss – 0.67522
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$396/ -$218
Profit & Loss Per Mini Lot = +$39/ -$21
AUD/USD Price Analysis – Oct 15, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair continued its downward trend, hovering around 0.6710 despite a generally risk-on market sentiment. This bearish movement was primarily influenced by disappointing trade balance data from China, which is Australia's largest trading partner, released on Monday.
Moreover, China announced a fiscal stimulus plan, but it did little to bolster the Australian dollar, as investors were left unsure about the package's size and impact. Compounding these challenges, the US dollar remained strong, fueled by expectations that the Federal Reserve will take a less aggressive approach to easing its monetary policy. As a result, traders are now looking ahead to the release of the Empire State Manufacturing Index and further comments from Fed officials.
Expectations of RBA Rate Cuts and Low Consumer Confidence Weigh on AUD/USD Pair
On the AUD front, the currency is facing downward pressure due to a report from the Commonwealth Bank of Australia. The report indicates that the Reserve Bank of Australia (RBA) is expected to cut interest rates by 25 basis points by the end of 2024. It also highlights that for the RBA to consider easing its policy this year, a stronger disinflationary trend than currently anticipated is needed. This expectation has contributed to the bearish sentiment surrounding the Australian dollar.
In addition, the latest weekly survey on Consumer Confidence showed little change, with the ANZ-Roy Morgan Consumer Confidence index remaining steady at 83.4. While this figure hasn't changed, it’s important to note that Consumer Confidence has stayed below the 85.0 mark for an unprecedented 89 weeks. However, the current reading is slightly above the 2024 weekly average of 82.1.
Last week, the RBA also released minutes from its September meeting, revealing that board members discussed possible scenarios for both increasing and decreasing interest rates in the future. They noted that future financial conditions might need to be either tighter or looser than they are now to achieve the RBA's objectives.
Therefore, the expectations of an RBA rate cut and persistently low Consumer Confidence are likely to weaken the AUD/USD pair, as traders may anticipate a bearish outlook for the Australian dollar amid ongoing uncertainty regarding Australia's economic conditions.
Impact of China's Fiscal Stimulus and Economic Data on AUD/USD Pair
On the other hand, China’s recent fiscal stimulus plan announced over the weekend did not strengthen the Australian dollar, as investors remained uncertain about the details and scale of the initiative. Adding to the tension, China conducted military drills in the Taiwan Strait on Monday. The US Department of State expressed serious concerns over these military actions, while Taiwan’s Defense Ministry assured that it would not escalate the situation further.
Moreover, China's National Bureau of Statistics reported that the Consumer Price Index (CPI) remained flat at 0% in September, down from a 0.4% increase in August. The annual inflation rate rose by only 0.4%, which was below the expected 0.6%. Meanwhile, the Producer Price Index (PPI) saw a more significant decline, dropping by 2.8% year-on-year, compared to a previous drop of 1.8% and exceeding expectations of a 2.5% decrease.
On a more positive note, the National People’s Congress expressed optimism after a briefing from China’s Ministry of Finance. The ministry highlighted its commitment to stabilizing the property market and addressing local government debt by issuing special bonds to support bank recapitalization and the real estate sector.
Therefore, the lack of clarity surrounding China’s fiscal stimulus, coupled with military tensions and weak inflation data, is likely to further pressure the Australian dollar. This uncertainty may lead to a continued decline in the AUD/USD pair as investor confidence wanes.
AUD/USD - Technical Analysis
AUD/USD is currently trading at $0.67130, down 0.19%, as the pair experiences selling pressure following its failure to break key resistance levels. The pivot point stands at $0.67304, with immediate resistance at $0.67576. A move above this could push the pair towards the next resistance levels at $0.67810 and $0.68105. However, current market sentiment appears bearish, suggesting that any rally may struggle to gain traction.
On the downside, immediate support is seen at $0.67025, with deeper support at $0.66828 and $0.66615. If AUD/USD breaks below these levels, it could signal further downside movement. The 50-day EMA at $0.67292 is trending just above current prices, indicating potential resistance on the path to recovery.
The RSI currently sits at 41, suggesting that the pair is in bearish territory. Momentum is skewed to the downside, indicating increased selling pressure. A break below the pivot point at $0.67304 may confirm further declines, with bears likely to target support at $0.66828.
Given the bearish technical signals, traders may consider short positions below $0.67304, with a take-profit target of $0.66908 and a stop-loss at $0.67522.
Related News
GOLD Price Analysis – Oct 15, 2024
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Testing Key Pivot: AUD/USD is hovering around the $0.67389 pivot point, a critical level for near-term direction.
- Immediate Resistance: A break above $0.67621 and the 50-day EMA at $0.67612 could signal a bullish trend continuation.
- Support Levels: A breach below $0.67108 could expose AUD/USD to deeper supports at $0.66915 and $0.66708.
The Australian Dollar (AUD/USD) is trading at $0.67392, up 0.33%, signaling a potential rebound from recent lows. On the 4-hour chart, the pair is testing the pivot point at $0.67389, which aligns with a minor support level.
If the AUD/USD sustains its position above this level, it could target the immediate resistance at $0.67621, followed by the 50-day Exponential Moving Average (EMA) at $0.67612. A successful breakout above the 50-day EMA would pave the way for further gains toward the next resistance levels at $0.67861 and $0.68105.
Conversely, if the AUD/USD fails to hold above $0.67389, the pair may encounter initial support at $0.67108, followed by deeper support levels at $0.66915 and $0.66708. A breach below $0.66708 would likely signal increased bearish pressure, exposing the pair to further downside risks.
The Relative Strength Index (RSI) stands at 50, indicating neutral market sentiment. This suggests that AUD/USD could move in either direction depending on whether it breaks above or below the current pivot level. With the RSI at equilibrium, traders should watch for a clear breakout above $0.67621 or a breakdown below $0.67108 for directional cues.
Given the current technical setup, buying interest above $0.67223 could drive the pair toward $0.67616, while a failure to maintain above this level may trigger selling pressure.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.67223
Take Profit – 0.67616
Stop Loss – 0.66905
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$397/ -$318
Profit & Loss Per Mini Lot = +$39/ -$31
AUD/USD Price Analysis – Oct 10, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair found itself in positive territory on Thursday, breaking a five-day losing streak and trading around 0.6730 level. This upward movement can be linked to a risk-on market sentiment, which generally supports the Australian dollar (AUD) and helped boost the pair’s value.
However, the stronger US dollar (USD) is casting a shadow, fueled by growing speculation that the Federal Reserve may implement a 25 basis point rate cut in November, putting pressure on the Aussie in the near term.
Moreover, recent efforts by Beijing to stimulate its economy fell short of expectations, disappointing investors.
China's top economic planning authority did not announce any new measures to boost growth, which raises concerns, especially since China is one of Australia’s major trading partners.
These worries about China's slowing economy could weigh on the value of the Australian dollar, highlighting the interconnectedness of global economies.
Fed Rate Cut and Its Impact on AUD/USD Pair
On the US front, the stronger US dollar is facing potential challenges as speculation grows around a possible 25 basis point rate cut by the Federal Reserve in November. Investors are keeping a close eye on the upcoming Consumer Price Index (CPI) inflation data, which will be released later on Thursday.
Notably, the headline CPI is expected to show a 2.3% year-over-year increase for September, while core CPI inflation is projected to rise by 3.2% in the same period.
If the report reveals softer inflation than expected, it could increase the likelihood of a significant Fed rate cut, which might weaken the dollar and support the Australian dollar (AUD).
In the meantime, the recent comments from Federal Reserve officials also suggest the possibility of rate cuts.
San Francisco Fed President Mary Daly mentioned that one or two more cuts could happen this year if economic conditions align with her expectations, expressing confidence that inflation is moving toward the Fed's 2% target.
Similarly, Boston Fed President Susan Collins indicated that weaker inflation trends make further rate reductions likely. Markets are currently pricing in nearly an 80% chance of a 25 basis point cut in November, a significant rise from 31.1% just last week, according to the CME FedWatch Tool.
Therefore, the potential for a Fed rate cut and softer inflation data could weaken the US dollar, providing support for the AUD/USD pair. This environment may help the Australian dollar recover some of its losses, counteracting the stronger dollar's influence.
Impact of China's Economic Challenges on the AUD/USD Pair
On the other side, Beijing's efforts to boost the economy have left investors disappointed, as the country's top economic planning authority did not introduce new measures to address slowing growth.
This is significant because China is a major trading partner for Australia, and concerns about its economic performance typically weaken the Australian dollar (AUD).
Meanwhile, the Reserve Bank of Australia's (RBA) September meeting minutes indicated that board members noted there would be no rate cuts in the near future but want to remain flexible to see if the economy improves later this year.
This approach keeps the possibility open for a neutral stance by the end of the year, with potential rate cuts in early 2025. ANZ analysts predict that the first cash rate cut may occur in February 2025.
Furthermore, the World Bank has forecasted a slowdown in China’s growth rate to 4.3% in 2025, down from a projected 4.8% this year.
Therefore, the disappointment in China's economic efforts and forecasts of slower growth are likely to weaken the Australian dollar (AUD), which may lead to a bearish outlook for the AUD/USD pair as investors react to these economic signals.
AUD/USD - Technical Analysis
The Australian Dollar (AUD/USD) is trading at $0.67392, up 0.33%, signaling a potential rebound from recent lows. On the 4-hour chart, the pair is testing the pivot point at $0.67389, which aligns with a minor support level.
If the AUD/USD sustains its position above this level, it could target the immediate resistance at $0.67621, followed by the 50-day Exponential Moving Average (EMA) at $0.67612.
A successful breakout above the 50-day EMA would pave the way for further gains toward the next resistance levels at $0.67861 and $0.68105.
Conversely, if the AUD/USD fails to hold above $0.67389, the pair may encounter initial support at $0.67108, followed by deeper support levels at $0.66915 and $0.66708.
A breach below $0.66708 would likely signal increased bearish pressure, exposing the pair to further downside risks.
The Relative Strength Index (RSI) stands at 50, indicating neutral market sentiment. This suggests that AUD/USD could move in either direction depending on whether it breaks above or below the current pivot level.
With the RSI at equilibrium, traders should watch for a clear breakout above $0.67621 or a breakdown below $0.67108 for directional cues.
Given the current technical setup, buying interest above $0.67223 could drive the pair toward $0.67616, while a failure to maintain above this level may trigger selling pressure.
Related News
USD/JPY Price Analysis – Oct 10, 2024
AUD/USD Price Analysis – Oct 08, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair has continued its bearish trend, trading around the 0.6734 level and hitting an intra-day low of 0.6715. This downward movement can be attributed to risk-off market sentiment, which tends to undermine riskier assets like the Australian dollar (AUD), contributing to the pair's losses. Moreover, comments from the National Development and Reform Commission during a recent press conference have further pressured the AUD/USD.
However, the losses could be short-lived due to the hawkish stance of the Reserve Bank of Australia (RBA) following its September Meeting Minutes. Meanwhile, the US dollar has slightly weakened despite strong jobs report for September has tempered expectations for aggressive rate cuts by the Federal Reserve. Hence, the bearish US dollar provides some support to the AUD/USD pair to limit its losses.
Looking ahead, investors are eager for insights from Fed officials later on Tuesday, as well as the Federal Open Market Committee (FOMC) Minutes. All eyes will then turn to the US Consumer Price Index (CPI) for September, set to be released on Thursday, which could significantly influence market direction.
Australian Dollar Under Pressure Amid Economic Concerns and RBA Caution
As we mentioned above, the Australian dollar is losing traction due to comments from the National Development and Reform Commission during a press conference. China's state planner indicated that the country's economy is facing a more complex internal and external environment, disappointing traders who were hoping for significant stimulus measures. Meanwhile, escalating geopolitical tensions in the Middle East have created a risk-off sentiment in the market, putting further selling pressure on riskier assets like the AUD.
Furthermore, the Reserve Bank of Australia (RBA) released its September Meeting Minutes on Tuesday, revealing that board members discussed future scenarios for both lowering and raising interest rates. The Minutes stated, “Policy will need to remain restrictive until Board members are confident inflation is moving sustainably towards the target range.”
RBA Deputy Governor Andrew Hauser emphasized that the central bank will take action only when inflation is no longer high and persistent. He noted that reducing inflation is a significant task and that they are not finished yet. This cautious approach suggests that the RBA is focused on maintaining stability amid current economic challenges.
Therefore, the news is likely to weaken the AUD/USD pair as risk-off sentiment and disappointing Chinese economic signals undermine the Australian dollar. The RBA's cautious stance on interest rates further contributes to bearish pressure on the AUD against the US dollar.
US Dollar Weakens Amid Strong Jobs Report and Cautious Fed Outlook
On the US front, the broad-based US dollar lost some of its gains on Tuesday. However, a strong jobs report for September has led to reduced expectations for aggressive rate cuts by the Federal Reserve. This report highlights a robust labor market, prompting investors to lower their bets on significant interest rate cuts. As a result, demand for gold, which is a non-yielding asset, has also been negatively affected. According to the CME's FedWatch tool, there is now an 85% chance of a 25 basis point rate cut at the Fed's next meeting in November.
Meanwhile, Federal Reserve officials are shifting their focus from concerns about high inflation to the potential risks of rising unemployment. Minneapolis Fed President Neel Kashkari pointed out this shift, while St. Louis Fed President Alberto Musalem noted that further interest rate cuts would depend on economic performance.
Traders are remaining cautious as they await important US inflation data, including the Consumer Price Index (CPI) and Producer Price Index (PPI), as well as the minutes from the Federal Open Market Committee (FOMC) meeting, both of which are due this week. These reports could significantly influence gold prices and market sentiment.
AUD/USD - Technical Analysis
The AUD/USD pair is currently trading at 0.67354, down 0.51% for the day, following a consistent bearish trend. This decline has pushed the pair below its key pivot point at 0.67678, indicating potential for further downside movement in the near term.
The 4-hour chart suggests that the pair is struggling to regain upward momentum as it hovers around immediate support at 0.67149. Should the price break below this support, the next targets would be at 0.66845 and 0.66569.
The Relative Strength Index (RSI) is hovering at 28, indicating that the pair is in oversold territory and may be due for a short-term corrective bounce. However, the bearish pressure remains strong as AUD/USD trades below its 50-day Exponential Moving Average (EMA) at 0.68150, suggesting that any upward moves could be limited by this resistance level.
On the upside, a move above the immediate resistance at 0.68078 could signal a potential reversal, with subsequent targets at 0.68417 and 0.68884. However, the overall technical sentiment favors further bearishness, particularly if prices continue to stay below the 0.67678 pivot point.
Given the current technical setup, traders should consider selling below 0.67671 with a take profit target at 0.67144 and a stop loss at 0.68050. However, any break above 0.68078 could shift sentiment toward a potential short-term recovery.
Related News
- GOLD Price Analysis – Oct 08, 2024
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Oversold Conditions: RSI is at 28, suggesting the possibility of a short-term bounce.
- Bearish Momentum: AUD/USD remains below its 50-day EMA at 0.68150, indicating a strong downtrend.
- Key Levels to Watch: A break below 0.67149 support could open the door to further declines toward 0.66845.
The AUD/USD pair is currently trading at 0.67354, down 0.51% for the day, following a consistent bearish trend. This decline has pushed the pair below its key pivot point at 0.67678, indicating potential for further downside movement in the near term.
The 4-hour chart suggests that the pair is struggling to regain upward momentum as it hovers around immediate support at 0.67149. Should the price break below this support, the next targets would be at 0.66845 and 0.66569.
The Relative Strength Index (RSI) is hovering at 28, indicating that the pair is in oversold territory and may be due for a short-term corrective bounce. However, the bearish pressure remains strong as AUD/USD trades below its 50-day Exponential Moving Average (EMA) at 0.68150, suggesting that any upward moves could be limited by this resistance level.
On the upside, a move above the immediate resistance at 0.68078 could signal a potential reversal, with subsequent targets at 0.68417 and 0.68884. However, the overall technical sentiment favors further bearishness, particularly if prices continue to stay below the 0.67678 pivot point.
Given the current technical setup, traders should consider selling below 0.67671 with a take profit target at 0.67144 and a stop loss at 0.68050. However, any break above 0.68078 could shift sentiment toward a potential short-term recovery.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.67671
Take Profit – 0.67144
Stop Loss – 0.68050
Risk to Reward – 1: 1.3
Profit & Loss Per Standard Lot = +$527/ -$379
Profit & Loss Per Mini Lot = +$52/ -$37
AUD/USD Price Analysis – Oct 03, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair has extended its downward trend, currently hovering around 0.6843 and hitting an intra-day low of 0.6841.
This decline is largely driven by the bullish performance of the US Dollar (USD), influenced by key economic data released on Thursday.
Moreover, a risk-off sentiment in the market has added to the downward pressure on the AUD/USD pair, as rising geopolitical tensions in the Middle East have shaken investor confidence.
According to the Israeli Broadcasting Authority (IBA), Israel's security cabinet has decided to take decisive action in response to a recent Iranian attack. On Tuesday night, Iran launched over 200 ballistic missiles and drones targeting Israel, escalating tensions in the region.
Despite these challenges, the downside risk for the AUD could be limited due to the hawkish stance of the Reserve Bank of Australia (RBA).
Recent data showed stronger-than-expected retail sales growth for August, reducing the chances of an early rate cut by the RBA.
Besides this, the AUD is receiving some support from stimulus measures implemented by China, Australia’s largest trading partner, which have helped boost commodity prices.
Impact of Strong US Labor Market Data on AUD/USD Pair
On the US front, the broad-based US dollar is gaining strength as recent economic data highlights a resilient labor market. This has led to tempered expectations for aggressive interest rate cuts by the Federal Reserve (Fed).
According to the CME FedWatch Tool, there’s a 65.4% chance of a 25 basis point rate cut in November, while the likelihood of a 50 basis point cut is at 34.6%, down from 57.4% just a week ago.
Tom Barkin, President of the Federal Reserve Bank of Richmond, emphasized that the fight against inflation isn’t over, noting that while a 50 basis point cut in September was justified, risks still exist.
Recent reports show positive employment trends, with the ADP Employment Change report revealing an increase of 143,000 jobs in September, exceeding the forecast of 120,000. Annual pay also rose by 4.7%.
However, the AiG Industry Index improved slightly but still indicates contraction for the 29th month in a row. The AiG Manufacturing PMI continued to decline, reaching its lowest level since the series began.
Meanwhile, Fed Chairman Jerome Powell stated that the central bank is not rushing to cut rates further, indicating that any future rate changes are likely to be more modest.
Therefore, the strengthening US dollar, driven by positive labor market data and tempered rate cut expectations, is likely to put further downward pressure on the AUD/USD pair, as investors may favor the USD over the Australian dollar in the current environment.
Positive Economic Indicators Support Australian Dollar Amid Global Uncertainties
Moreover, the downside risk for the Australian dollar (AUD) could be limited due to the hawkish outlook of the Reserve Bank of Australia (RBA). Recent data revealed stronger-than-expected retail sales growth of 0.7% month-over-month in August, surpassing forecasts of a 0.4% increase.
This growth has lowered the chances of an early rate cut by the RBA, with markets almost fully discounting a rate cut in November. In the meantime, stimulus measures from China, Australia’s largest trading partner, have boosted commodity prices, providing further support to the AUD.
In terms of trade balance, Australia recorded a surplus of 5,644 million in August, exceeding market expectations of 5,500 million and slightly higher than July’s surplus of 5,636 million.
However, both exports and imports saw a decline of 0.2% month-over-month during this period. The Judo Bank Services Purchasing Managers' Index (PMI) stood at 50.5 in September, down from 52.5 in August, indicating continued growth in services activity but at a slower pace.
Meanwhile, the Composite PMI dipped slightly to 49.6 in September from 49.8 the previous month, suggesting a slight contraction in overall economic activity.
Therefore, the hawkish stance of the Reserve Bank of Australia, supported by strong retail sales growth and a positive trade balance, bolster the AUD against the USD, mitigating some downward pressure on the AUD/USD pair amid global uncertainties.
AUD/USD - Technical Analysis
The Australian Dollar (AUD) is losing ground against the U.S. Dollar (USD), currently trading at $0.68622, down 0.33% for the session.
The bearish pressure comes amid heightened risk aversion, as investors digest mixed U.S. economic data and concerns over China’s economic slowdown, which is weighing on commodity-linked currencies like the AUD.
The 4-hour chart shows that the AUD/USD pair is struggling to hold above its pivot point at $0.68873, indicating sellers are dominating the market. Immediate support is found at $0.68423, with subsequent support levels at $0.68211 and $0.67994.
The technical indicators reinforce a cautious outlook. The 50-day Exponential Moving Average (EMA) hovers at $0.69022, well above the current price, underscoring the bearish momentum.
Meanwhile, the Relative Strength Index (RSI) is at 37, approaching oversold territory but not yet signaling a reversal. Traders should remain vigilant as a break below $0.68423 could see the AUD/USD pair testing deeper support levels.
Immediate resistance stands at $0.69160, and for any significant recovery, the pair would need to surpass this barrier, targeting $0.69403 and $0.69622 as next upside objectives.
The short-term outlook remains bearish, particularly if the pair continues to trade below its 50 EMA, which could open doors for further declines.
Conclusion: Traders might consider entering short positions below $0.6878, aiming for a take profit around $0.68426, while maintaining a stop-loss at $0.69051 to manage risk effectively.
Related News
USD/JPY Price Analysis – Oct 03, 2024