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.
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AUD/USD Price Analysis – Oct 01, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair maintained its upward momentum, trading strongly around the 0.6920 level and reaching an intraday high of 0.6935, driven by strong Retail Sales data.
However, the Australian Bureau of Statistics (ABS) reported a month-over-month increase in consumer spending of 0.7% for August, significantly exceeding market expectations of a 0.4% rise.
This positive development, coupled with the Reserve Bank of Australia's (RBA) hawkish stance on interest rates, has further supported the Australian Dollar.
It should be noted that RBA held its cash rate steady at 4.35% for the seventh consecutive meeting, highlighting the necessity of a restrictive policy to combat inflation.
Moreover, China’s recent stimulus measures have bolstered the demand outlook in Australia’s largest trading partner, driving up commodity prices and further strengthening the commodity-linked Australian Dollar.
Australian Dollar Supported by RBA's Hawkish Stance and China's Stimulus Measures
As we mentioned above the Australian dollar gained traction after the hawkish stance by the Reserve Bank of Australia (RBA) regarding interest rates.
The RBA has held its cash rate steady at 4.35% for the seventh consecutive meeting, emphasizing the need for a restrictive policy to keep inflation in check.
Meanwhile, China’s recent stimulus measures have improved demand from Australia’s largest trading partner, driving up commodity prices and bolstering the Australian Dollar.
However, there are mixed signals emerging from China’s manufacturing sector. The Caixin Manufacturing Purchasing Managers' Index (PMI) fell to 49.3 in September, signaling contraction, while the NBS Manufacturing PMI showed improvement at 49.8, surpassing expectations.
During his recent visit to China, Australian Treasurer Jim Chalmers addressed the country’s economic slowdown, expressing optimism about the new stimulus measures as a positive step forward.
China plans to inject over CNY 1 trillion into its largest state banks to tackle issues like shrinking profit margins and rising bad loans, marking the first major capital infusion since the 2008 financial crisis.
Meanwhile, the RBA reported that Australia’s domestic financial system remains resilient, although concerns linger about stress in China’s financial sector and a small but growing number of Australian borrowers struggling with mortgage payments.
Therefore, the hawkish stance of the RBA and China's stimulus measures support the Australian Dollar, strengthening the AUD/USD pair. However, mixed manufacturing data from China and concerns about domestic borrower defaults may limit significant gains for the AUD.
Impact of Federal Reserve's Rate Cut Stance on AUD/USD Pair
On the US front, recent comments from Federal Reserve Chairman Jerome Powell indicate that the central bank is not in a hurry to implement aggressive rate cuts. He emphasized that any reductions to the benchmark rate will be made gradually over time, reassuring markets that the recent half-point cut should not be interpreted as a signal for more drastic actions in the future.
Current market expectations, reflected in the CME FedWatch Tool, show a 61.8% chance of a 25 basis point rate cut in November. Meanwhile, the likelihood of a larger 50 basis point cut has fallen to 38.2%. This cautious approach underscores the Fed's commitment to carefully navigating the economic landscape, ensuring that any adjustments align with broader economic conditions.
Additionally, St. Louis Federal Reserve President Alberto Musalem emphasized that the Fed should consider implementing gradual interest rate cuts after the significant half-point reduction in September. He acknowledged the possibility of economic weakness and suggested that a quicker pace of cuts might be necessary if conditions deteriorate.
On the data front, the US Core Personal Consumption Expenditures (PCE) Price Index rose by just 0.1% month-over-month in August, falling short of the expected 0.2% increase. This softer inflation reading aligns with the Fed's outlook of easing inflation in the US and reinforces the idea that a more aggressive rate-cutting cycle could be on the horizon.
Therefore, the cautious approach of the Federal Reserve regarding rate cuts, combined with lower-than-expected inflation data, may bolster the US Dollar. This could limit the upward potential of the AUD/USD pair, as the Australian Dollar faces pressure from a stronger USD.
AUD/USD - Technical Analysis
The Australian dollar (AUD) continues to edge higher against the U.S. dollar (USD), maintaining a cautious upward trajectory. As of the latest trading session, the AUD/USD pair is trading at $0.69223, marking a slight 0.15% increase.
This recent climb positions the pair above its pivot point at $0.69069, suggesting a potential for further gains if key resistance levels are breached.
Immediate resistance is observed at $0.69403, followed by additional hurdles at $0.69622 and $0.69823. The 50-day Exponential Moving Average (EMA) is currently situated at $0.69140, serving as a critical support area that underpins the current bullish bias.
A sustained hold above this level could reinforce the bullish outlook, encouraging further buying interest.
The Relative Strength Index (RSI) reads 48, signaling neutral momentum with a slight inclination towards the upside. This neutral reading suggests that the market is not yet overbought or oversold, offering room for additional price movement in either direction.
On the downside, immediate support is identified at $0.68886. Should the price break below this level, it could trigger a deeper correction towards $0.68696 and $0.68478, where buyers might step in.
Given the technical setup, a potential buy entry above $0.69069 appears favorable, targeting $0.69406 while maintaining a stop-loss just below immediate support at $0.68886.
The AUD/USD’s recent resilience hints at a measured bullish sentiment, provided it remains above the 50-EMA.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Pivot Point Support at $0.69069: The pair’s ability to hold above this level is crucial for maintaining a bullish bias.
- RSI Near Neutral at 48: Momentum is evenly balanced, suggesting no imminent overbought or oversold conditions.
- Resistance at $0.69403 in Focus: A decisive break above this level could propel AUD/USD towards $0.69622 and higher.
The Australian dollar (AUD) continues to edge higher against the U.S. dollar (USD), maintaining a cautious upward trajectory. As of the latest trading session, the AUD/USD pair is trading at $0.69223, marking a slight 0.15% increase.
This recent climb positions the pair above its pivot point at $0.69069, suggesting a potential for further gains if key resistance levels are breached.
Immediate resistance is observed at $0.69403, followed by additional hurdles at $0.69622 and $0.69823. The 50-day Exponential Moving Average (EMA) is currently situated at $0.69140, serving as a critical support area that underpins the current bullish bias.
A sustained hold above this level could reinforce the bullish outlook, encouraging further buying interest.
The Relative Strength Index (RSI) reads 48, signaling neutral momentum with a slight inclination towards the upside. This neutral reading suggests that the market is not yet overbought or oversold, offering room for additional price movement in either direction.
On the downside, immediate support is identified at $0.68886. Should the price break below this level, it could trigger a deeper correction towards $0.68696 and $0.68478, where buyers might step in.
Given the technical setup, a potential buy entry above $0.69069 appears favorable, targeting $0.69406 while maintaining a stop-loss just below immediate support at $0.68886.
The AUD/USD’s recent resilience hints at a measured bullish sentiment, provided it remains above the 50-EMA.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.69069
Take Profit – 0.69406
Stop Loss – 0.68886
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$337/ -$183
Profit & Loss Per Mini Lot = +$33/ -$18
AUD/USD Price Analysis – Sep 26, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair halted its downward trend and turned bullish around the 0.6882 level, reaching an intra-day high of 0.6887.
This rebound is largely fueled by contrasting monetary policy outlooks from the Reserve Bank of Australia (RBA) and the Federal Reserve.
Moreover, the Australian Dollar received a notable boost after China, its largest trading partner, announced new stimulus measures aimed at reviving its economy.
Moreover, the RBA's decision to keep the Official Cash Rate steady at 4.35% provided further support for the AUD.
On the other hand, the Federal Open Market Committee (FOMC) recently cut the federal funds rate, which has heightened market expectations for more cuts before the year ends.
This divergence in policy direction has created a favorable environment for the Australian Dollar.
Potential Impacts of China's Stimulus on AUD/USD Pair Amid Domestic Challenges
China is set to inject over CNY 1 trillion into its largest state banks, which are struggling with shrinking margins, declining profits, and rising bad loans. This move marks the first major capital boost since the 2008 global financial crisis.
Meanwhile, the Reserve Bank of Australia's September 2024 Financial Stability Review indicates that the Australian financial system remains resilient, although concerns persist about stress in China’s financial sector and its limited responses to these challenges.
In Australia, a small but growing number of home borrowers are falling behind on payments, with about 2% of owner-occupier borrowers facing serious default risks.
In addition, Australian Treasurer Jim Chalmers plans to visit China this week to strengthen economic ties, highlighting the need to engage with key Chinese officials due to Australia’s vulnerability to the Chinese economy.
JP Morgan recently advised investors to keep an eye on commodities and bond yields, as China's stimulus measures could enhance global growth and reduce recession risks. However, they also warned about the potential for reinflation.
In Australia, the Monthly Consumer Price Index rose by 2.7% year-over-year in August, down from 3.5%, indicating shifting economic conditions.
Therefore, the news of China’s capital injection and stimulus measures could strengthen the AUD/USD pair, as improved economic prospects in China may boost demand for Australian exports. However, concerns over rising default risks in Australia may limit AUD gains.
Impact of Federal Reserve Rate Cuts on AUD/USD Trends
On the US front, Federal Reserve Governor Adriana Kugler expressed strong support for the Fed's recent decision to cut interest rates by half a percentage point. She indicated that if inflation continues to decrease as expected, further rate cuts would be appropriate.
This significant cut lowered the federal funds rate to a range of 4.75% to 5.0%, marking the first rate reduction in over four years.
The market is now pricing in about a 50% chance of an additional 75 basis points cut by the end of the year, potentially bringing the rate down to between 4.0% and 4.25%.
Traders are particularly attentive to the upcoming release of the final US Gross Domestic Product (GDP) Annualized report for the second quarter (Q2), which is set to be announced later in the North American session.
This data will be crucial in shaping expectations about the US economy and could influence future decisions by the Federal Reserve regarding interest rates.
Therefore, the Federal Reserve's interest rate cut and potential for further reductions may weaken the US dollar, potentially boosting the AUD/USD pair. However, the upcoming GDP report could introduce volatility, influencing market sentiment and short-term trading strategies.
AUD/USD - Technical Analysis
The Australian Dollar (AUD/USD) has gained 0.32% on the day, trading around $0.68417, reflecting some positive momentum in an otherwise cautious market.
The pair is currently moving below the pivot point at $0.6860, with the 50-day Exponential Moving Average (EMA) also aligned at this level, acting as a significant technical barrier.
Immediate resistance stands at $0.6907, which, if breached, could open the door for further gains towards $0.6946 and $0.6983, respectively.
On the downside, immediate support lies at $0.6819, with additional supports at $0.6783 and $0.6744. Traders are carefully monitoring the $0.6860 level, as it serves as both a pivot point and a key resistance zone.
A break above this level would likely invalidate the current bearish setup. The Relative Strength Index (RSI) is currently at 46, signaling neutral momentum with a slight tilt towards oversold conditions, which suggests the possibility of a rebound in the near term.
For traders, a sell limit entry at $0.6860 is advised, with a take-profit target at $0.68189, supported by the immediate downside levels. A stop-loss at $0.68879 would help mitigate risk in case of an upward breakout.
Overall, the AUD/USD pair remains vulnerable to downside pressure as long as prices stay below the 50-EMA.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD faces strong resistance at $0.6860, coinciding with the 50-EMA.
- Immediate support rests at $0.6819, with downside targets at $0.6783.
- RSI at 46 suggests neutral momentum, with potential for near-term recovery.
The Australian Dollar (AUD/USD) has gained 0.32% on the day, trading around $0.68417, reflecting some positive momentum in an otherwise cautious market. The pair is currently moving below the pivot point at $0.6860, with the 50-day Exponential Moving Average (EMA) also aligned at this level, acting as a significant technical barrier.
Immediate resistance stands at $0.6907, which, if breached, could open the door for further gains towards $0.6946 and $0.6983, respectively.
On the downside, immediate support lies at $0.6819, with additional supports at $0.6783 and $0.6744. Traders are carefully monitoring the $0.6860 level, as it serves as both a pivot point and a key resistance zone.
A break above this level would likely invalidate the current bearish setup. The Relative Strength Index (RSI) is currently at 46, signaling neutral momentum with a slight tilt towards oversold conditions, which suggests the possibility of a rebound in the near term.
For traders, a sell limit entry at $0.6860 is advised, with a take-profit target at $0.68189, supported by the immediate downside levels. A stop-loss at $0.68879 would help mitigate risk in case of an upward breakout. Overall, the AUD/USD pair remains vulnerable to downside pressure as long as prices stay below the 50-EMA.
AUD/USD - Trade Ideas
Entry Price – Sell Limit 0.68600
Take Profit – 0.68189
Stop Loss – 0.68879
Risk to Reward – 1: 1.4
Profit & Loss Per Standard Lot = +$411/ -$279
Profit & Loss Per Mini Lot = +$41/ -$279
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate Resistance at $0.6870, with further resistance at $0.6902 and $0.6928.
- Immediate Support at $0.6784, with next levels at $0.6757 and $0.6725.
- RSI stands at 51, indicating neutral market conditions with room for directional shifts.
The Australian dollar (AUD/USD) is currently trading at $0.68304, up 0.25%, as the pair shows a modest recovery during the Asian session. The price remains above its 50-day Exponential Moving Average (EMA) of $0.6811, indicating short-term bullish momentum.
Immediate resistance is seen at $0.6870, just above the pivot point of $0.6869. A break above this level could lead the pair toward the next resistance at $0.6902, and potentially extend to $0.6928 if momentum holds.
On the downside, immediate support is located at $0.6784, with further key levels at $0.6757 and $0.6725.
Technically, the RSI (Relative Strength Index) is positioned at 51, suggesting a neutral stance, with neither overbought nor oversold conditions.
This gives the market room to maneuver in either direction, depending on upcoming catalysts, such as U.S. and Australian economic data releases.
The pair’s trajectory remains cautiously bullish as long as it stays above the 50 EMA. However, the pivot point at $0.6869 will be crucial for further upside. If prices can break above immediate resistance, AUD/USD could see an extension toward the $0.6902 and $0.6928 resistance levels. Conversely, a dip below $0.68084 could shift sentiment toward the downside, with targets near the $0.67798 stop-loss level.
Overall, AUD/USD looks poised for a potential rally above $0.68084, targeting $0.68693, while maintaining a stop-loss at $0.67798 to manage downside risk.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.68084
Take Profit – 0.68693
Stop Loss – 0.67798
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$609/ -$286
Profit & Loss Per Mini Lot = +$60/ -$28
AUD/USD Price Analysis – Sep 24, 2024
Daily Price Outlook
During the European trading session on Tuesday, the AUD/USD currency pair maintained its upward momentum, remaining well bid around the 0.6850 level and reaching an intra-day high of 0.6870.
The pair's upward movement was supported by upbeat market sentiment, which generally benefits risk-sensitive currencies like the Australian dollar.
Furthermore, a bearish US dollar, pressured by expectations of more aggressive policy easing by the Federal Reserve, provided further support for the AUD/USD pair.
Furthermore, China's announcement of a broad range of stimulus measures to boost its faltering economy also bolstered the Australian dollar.
RBA’s Steady Policy and China’s Stimulus Measures Boost AUD/USD Outlook
On the AUD front, the Australian central bank kept interest rates unchanged for the seventh consecutive meeting, as expected. The Reserve Bank of Australia (RBA) emphasized that monetary policy will remain restrictive until inflation shows clear signs of moving toward the target range.
RBA Governor Michele Bullock noted that recent data has not significantly changed the bank's policy outlook, reinforcing the central bank’s cautious stance.
Meanwhile, China's efforts to boost its slowing economy added support to the AUD/USD pair. On Tuesday, China announced a broad range of stimulus measures, including the People's Bank of China (PBOC) cutting the Reserve Requirement Ratio (RRR) by 50 basis points, which will release about 1 trillion yuan for new lending.
This move, combined with renewed US dollar weakness, has been a positive factor for the Australian dollar, as stronger economic ties with China benefit Australia's economy.
These factors are expected to act as a tailwind for the AUD/USD pair, supporting its upward momentum.
Weak US Dollar and Global Equity Strength Boost AUD/USD Prospects
On the US front, the US dollar has been losing momentum due to expectations that the Federal Reserve may adopt more aggressive policy easing. This outlook has weighed on the dollar's recovery from its year-to-date low.
Additionally, the strong performance of global equity markets has further reduced demand for the US dollar as a safe-haven asset.
These factors are helping to limit any potential losses for the AUD/USD pair and are likely to support further short-term gains.
As the US dollar remains weak, it provides a favorable environment for the Australian dollar to strengthen against it.
AUD/USD - Technical Analysis
The Australian dollar (AUD/USD) is currently trading at $0.68304, up 0.25%, as the pair shows a modest recovery during the Asian session. The price remains above its 50-day Exponential Moving Average (EMA) of $0.6811, indicating short-term bullish momentum.
Immediate resistance is seen at $0.6870, just above the pivot point of $0.6869. A break above this level could lead the pair toward the next resistance at $0.6902, and potentially extend to $0.6928 if momentum holds.
On the downside, immediate support is located at $0.6784, with further key levels at $0.6757 and $0.6725.
Technically, the RSI (Relative Strength Index) is positioned at 51, suggesting a neutral stance, with neither overbought nor oversold conditions.
This gives the market room to maneuver in either direction, depending on upcoming catalysts, such as U.S. and Australian economic data releases.
The pair’s trajectory remains cautiously bullish as long as it stays above the 50 EMA. However, the pivot point at $0.6869 will be crucial for further upside. If prices can break above immediate resistance, AUD/USD could see an extension toward the $0.6902 and $0.6928 resistance levels.
Conversely, a dip below $0.68084 could shift sentiment toward the downside, with targets near the $0.67798 stop-loss level.
Overall, AUD/USD looks poised for a potential rally above $0.68084, targeting $0.68693, while maintaining a stop-loss at $0.67798 to manage downside risk.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD remains bullish above $0.6809, with key resistance at $0.6868 and $0.6888.
- 50-day EMA at $0.6749 provides strong support for the ongoing uptrend.
- RSI at 66 indicates approaching overbought territory, but momentum remains positive for now.
The AUD/USD pair is trading at $0.6872, up 0.83%, signaling bullish momentum as it moves above key technical levels. Immediate resistance lies at $0.6845, with further resistance targets at $0.6868 and $0.6888. On the downside, immediate support is found at $0.6784, followed by deeper supports at $0.6750 and $0.6725.
The 50-day Exponential Moving Average (EMA) at $0.6749 is providing solid support, indicating that the current upward trend remains intact. The Relative Strength Index (RSI) sits at 66, suggesting the market is nearing overbought conditions, but still leaves room for further gains.
A break above $0.6868 would confirm the bullish trend, targeting the next resistance at $0.6888. However, if the pair falls below $0.6784, it could trigger a shift toward a more bearish outlook, testing the $0.6750 support level.
With China being a key trading partner for Australia, any news regarding China's economic performance or trade relations will likely influence the next move for AUD/USD. Additionally, the U.S. dollar’s performance following the Federal Reserve’s recent interest rate decisions will play a critical role in the pair’s trajectory.
In summary, AUD/USD shows strong bullish signals but faces immediate resistance. Traders should watch for a breakout above $0.6868 to confirm further upward momentum.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.68086
Take Profit – 0.68511
Stop Loss – 0.67830
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$425/ -$256
Profit & Loss Per Mini Lot = +$42/ -$25
AUD/USD Price Analysis – Sep 19, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair maintained its upward trend and remained well-bid around the $0.6832 level, hitting an intra-day high of $0.6840. This upward movement can be attributed to the higher-than-expected increase in new jobs created in August.
Meanwhile, the bearish US dollar, driven by the Federal Reserve’s (Fed) 50 basis point (bps) interest rate cut, was another key factor that kept the AUD/USD pair higher.
Moving ahead, the People’s Bank of China’s (PBoC) Monetary Policy Committee (MPC) is scheduled to hold its quarterly meeting on Friday to review its loan prime rate (LPR).
RBA's Stance and Strong Employment Data Support AUD/USD, but Inflation Remains a Concern
On the AUD front, the Reserve Bank of Australia (RBA) Governor Michele Bullock stated that it is too early to consider rate cuts due to ongoing high inflation.
RBA Assistant Governor Sarah Hunter added that, although the labor market remains tight, wage growth seems to have peaked and may slow down.
In August, Australia’s unemployment rate stayed at 4.2%, as expected, while the number of unemployed people fell by 10,000, bringing the total to 627,000.
Employment increased by 47,500 jobs, which exceeded the forecast of 25,000, but was lower than July’s 58,200.
The Australian Bureau of Statistics (ABS) noted that full-time employment dipped by 3,100, while part-time employment rose by 50,600.
The participation rate held steady at a record 67.1%, and the employment-to-population ratio slightly improved to 64.3%, just shy of its November 2023 peak.
Although unemployment figures fell slightly in August, the number of unemployed people has grown by 45,000 since the end of 2023. Overall, Australia's labor market continues to show resilience despite some fluctuations.
This news could provide short-term support for AUD/USD, as stronger-than-expected employment data and stable unemployment may boost confidence in the Australian economy. However, ongoing high inflation and wage growth concerns may limit the currency's long-term gains.
Impact of the Federal Reserve Rate Cut and US Economic Data on the AUD/USD Pair
On the US front, the broad-based US dollar lost its strength after the Federal Reserve unexpectedly cut interest rates by 50 basis points, instead of the expected 25. The Fed lowered its benchmark rate to a range of 4.75%–5% and signaled another half-point cut by year-end.
According to updated forecasts, rates are expected to drop further to 3.4% in 2025 and 2.9% in 2026, down from earlier projections of 4.1% and 3.1%.
The Fed also indicated that inflation won't hit its 2% target before 2026, raising doubts about future rate cuts. Despite this, Fed Chair Jerome Powell reassured that there is no immediate recession risk, pointing to a strong labor market and cooling inflation.
In other economic data, US Retail Sales rose by 0.1% month-over-month in August, following a stronger 1.1% rise in July, which beat expectations of a 0.2% decline.
This suggests consumer spending remains resilient. The Retail Sales Control Group increased by 0.3%, slightly below the previous month’s 0.4%.
Meanwhile, the University of Michigan’s Consumer Sentiment Index rose to 69.0 in September, higher than expected, reflecting an improving outlook on the US economy after months of uncertainty.
Therefore, the unexpected rate cut by the Federal Reserve could actually support the AUD/USD pair, as a weaker US dollar generally boosts other currencies like the Australian dollar.
However, the positive US retail data and improved consumer sentiment might prevent significant gains for AUD/USD.
AUD/USD - Technical Analysis
The AUD/USD pair is trading at $0.6872, up 0.83%, signaling bullish momentum as it moves above key technical levels. Immediate resistance lies at $0.6845, with further resistance targets at $0.6868 and $0.6888.
On the downside, immediate support is found at $0.6784, followed by deeper supports at $0.6750 and $0.6725.
The 50-day Exponential Moving Average (EMA) at $0.6749 is providing solid support, indicating that the current upward trend remains intact.
The Relative Strength Index (RSI) sits at 66, suggesting the market is nearing overbought conditions, but still leaves room for further gains.
A break above $0.6868 would confirm the bullish trend, targeting the next resistance at $0.6888. However, if the pair falls below $0.6784, it could trigger a shift toward a more bearish outlook, testing the $0.6750 support level.
With China being a key trading partner for Australia, any news regarding China's economic performance or trade relations will likely influence the next move for AUD/USD.
Additionally, the U.S. dollar’s performance following the Federal Reserve’s recent interest rate decisions will play a critical role in the pair’s trajectory.
In summary, AUD/USD shows strong bullish signals but faces immediate resistance. Traders should watch for a breakout above $0.6868 to confirm further upward momentum.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate resistance stands at $0.6767, with further targets at $0.6793 and $0.6816.
- RSI at 64 suggests bullish momentum but warns of near-term overbought conditions.
- Buy above $0.67336, targeting $0.67832 with a stop loss at $0.66962 to limit downside risk.
The Australian dollar (AUD/USD) is trading at $0.67478, down 0.13% for the day, as the pair continues to consolidate just above its pivot point of $0.6734.
The 4-hour chart shows a steady upward trend, although the pair has recently encountered minor selling pressure. The immediate resistance at $0.6767 is the key level for bulls to watch.
A break above this could open the door to further upside, with the next resistance levels at $0.6793 and $0.6816, where buyers may face greater opposition.
On the downside, immediate support sits at $0.6698, where the 50-day EMA aligns, providing a solid floor for the pair. If prices break below this level, the next support levels lie at $0.6667 and $0.6635, suggesting potential for a deeper pullback.
The RSI is currently at 64, indicating mild bullish momentum, but edging closer to overbought territory. This suggests that while the trend remains positive, there may be a short-term pause before the next significant move.
A break above $0.67336 offers a potential buying opportunity, with targets around $0.67832. Traders should maintain a stop loss near $0.66962 to manage risk in case of a reversal.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.67336
Take Profit – 0.67832
Stop Loss – 0.66962
Risk to Reward – 1: 3
Profit & Loss Per Standard Lot = +$496/ -$374
Profit & Loss Per Mini Lot = +$49/ -$37