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
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate resistance at $0.6720 is crucial; a break above could accelerate gains toward $0.6751.
- Support at $0.6635 is pivotal; a breach could trigger further downside pressure.
- The pair remains buoyed by the 50-day EMA at $0.6672, a key technical level that supports the current uptrend.
AUD/USD is trading at $0.66907, up by 0.25%, reflecting a moderate recovery as the pair attempts to gain traction within a largely subdued environment.
The currency pair is hovering above its 50-day Exponential Moving Average (EMA) at $0.6672, a crucial technical level that has served as dynamic support.
This indicates that the bullish momentum could build further if the pair manages to break through immediate resistance levels.
Immediate resistance stands at $0.6720, aligning with the pivot point, which could be a key level for bullish traders.
A break above this resistance could lead AUD/USD toward $0.6751, followed by the next target at $0.6793, suggesting a broader upside potential. However, a failure to breach $0.6720 may limit gains and reinforce selling pressure.
On the downside, immediate support is located at $0.6635, and a move below this could push the pair toward $0.6610 and further down to $0.6580.
The RSI at 60 suggests a mild bullish bias, but it's not yet in overbought territory, signaling there’s room for upward movement.
Traders should be mindful of these key levels. A sustained move above the $0.6720 pivot point is critical for extending the bullish trajectory, while a fall below $0.6635 could signal a deeper correction.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.66718
Take Profit – 0.67198
Stop Loss – 0.66344
Risk to Reward – 1: 1.2
Profit & Loss Per Standard Lot = +$480/ -$374
Profit & Loss Per Mini Lot = +$48/ -$37
AUD/USD Price Analysis – Sep 12, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair managed to halt its downward trend and regain some of its gains around the 0.6676 level, reaching an intra-day high of 0.6695.
These gains occurred despite the US dollar gaining momentum amid decreasing odds for a significant Fed rate cut.
The upward trend in the AUD/USD can be attributed to the risk-on market sentiment, which generally supports the Australian dollar and contributes to its gains.
On the other hand, news that China might cut interest rates on $5 trillion in mortgages to boost consumption has raised concerns about a slowdown in its economy.
This, combined with a slight strengthening of the US Dollar (USD), has led to a sharp decline in the Australian Dollar (AUD).
China's Potential Rate Cuts and USD Strength Impacting AUD
On the AUD front, reports suggest that China might cut interest rates on $5 trillion in mortgages this month to boost consumer spending. This has raised concerns about a slowdown in China's economy, which is the world's second-largest.
These worries have negatively impacted currencies from countries closely linked to China, such as the Australian Dollar (AUD).
Meanwhile, a slight strengthening of the US Dollar (USD) has contributed to the sharp drop in the AUD. The combination of fears about China's economic slowdown and the stronger USD has led to a significant decline in the AUD during the trading session.
Impact of US CPI Report and Fed Rate Cut Expectations on AUD/USD
On the US front, the latest Consumer Price Index (CPI) report showed that overall consumer prices are easing. However, the core CPI data, which excludes volatile items like food and energy, indicates that underlying inflation remains stubbornly high.
This has reduced expectations for a significant rate cut by the Federal Reserve (Fed) at their next meeting. As a result, US Treasury bond yields have risen, pushing the US Dollar closer to its monthly peak.
Despite this, investors believe that the Fed will start easing its policy and cut interest rates by 25 basis points at each of the remaining three meetings in 2024.
This belief, coupled with a positive market mood, has limited further gains for the US Dollar and provided some support for the Australian Dollar (AUD).
Traders are now waiting for the US Producer Price Index (PPI) report to provide new direction for the market.
Therefore, the easing US CPI and persistent core inflation have bolstered US Treasury yields and strengthened the US Dollar, pushing the AUD/USD pair lower. However, expectations of future Fed rate cuts and positive market sentiment have provided some support to the AUD.
AUD/USD - Technical Analysis
AUD/USD is trading at $0.66907, up by 0.25%, reflecting a moderate recovery as the pair attempts to gain traction within a largely subdued environment.
The currency pair is hovering above its 50-day Exponential Moving Average (EMA) at $0.6672, a crucial technical level that has served as dynamic support. This indicates that the bullish momentum could build further if the pair manages to break through immediate resistance levels.
Immediate resistance stands at $0.6720, aligning with the pivot point, which could be a key level for bullish traders.
A break above this resistance could lead AUD/USD toward $0.6751, followed by the next target at $0.6793, suggesting a broader upside potential. However, a failure to breach $0.6720 may limit gains and reinforce selling pressure.
On the downside, immediate support is located at $0.6635, and a move below this could push the pair toward $0.6610 and further down to $0.6580.
The RSI at 60 suggests a mild bullish bias, but it's not yet in overbought territory, signaling there’s room for upward movement.
Traders should be mindful of these key levels. A sustained move above the $0.6720 pivot point is critical for extending the bullish trajectory, while a fall below $0.6635 could signal a deeper correction.
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AUD/USD Price Analysis – Sep 10, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair struggled to maintain its earlier gains and turned bearish around the 0.6655 level, hitting an intraday low of 0.6644.
This decline was primarily driven by a stronger US dollar, which gained momentum after recent labor data hinted at a reduced likelihood of a sharp Fed rate cut in September.
However, the pair managed to recover its intraday losses after the positive trade data from China. Looking ahead, the upcoming Consumer Price Index (CPI) report on Wednesday and the Producer Price Index (PPI) on Thursday will be crucial in shaping the Fed’s rate policy.
These reports could also influence gold prices, given its status as a non-interest-bearing asset.
Stronger US Dollar and Bearish AUD/USD Due to Fed Rate Cut Expectations and Mixed Labor Data
On the US front, the broad-based US dollar gained support as recent labor market data introduced uncertainty about a potential aggressive rate cut by the Federal Reserve (Fed) in September.
According to the CME FedWatch Tool, the market expects at least a 25 basis point rate cut by the Fed, but the chance of a larger 50 basis point cut has slightly decreased to 29.0%, down from 30.0% last week. This shift in expectations contributed to the bearish movement of the AUD/USD pair.
In recent US data, Nonfarm Payrolls (NFP) increased by 142,000 jobs in August, falling short of the 160,000 forecast but improving from July’s revised figure of 89,000.
The Unemployment Rate dropped to 4.2%, as expected, from 4.3% the previous month. Fed Bank of Chicago President Austan Goolsbee indicated that Fed officials are aligning with the market's sentiment about a potential policy rate adjustment.
FXStreet’s FedTracker rated Goolsbee’s comments as dovish, suggesting a lower likelihood of a drastic rate cut.
Therefore, the shift in expectations for a smaller Fed rate cut, combined with mixed US labor data, has led to a stronger US dollar and bearish movement in the AUD/USD pair. This is due to reduced rate cut speculation and improved US economic indicators.
AUD/USD Strengthens Amidst Chinese Trade Data and RBA Rate Cut Expectations
On the AUD front, the AUD/USD pair gained traction after China's Trade Balance data was released on Tuesday. RBC Capital Markets now anticipates the Reserve Bank of Australia (RBA) will cut rates in February 2025, earlier than previously forecasted for May 2025. Despite persistent inflation in Australia, the RBA doesn’t see the slower economic growth as a strong enough reason to lower rates this year.
Meanwhile, Australia's Westpac Consumer Confidence fell by 0.5% in September, reversing August’s 2.8% increase. Traders are closely watching China’s upcoming Trade Balance data due to the strong trade ties between Australia and China. Changes in China’s economic performance can significantly impact Australian markets.
China’s Consumer Price Index (CPI) rose by 0.6% year-on-year in August, a slight improvement from July but below expectations. Monthly CPI inflation increased by 0.4%, missing the forecast. China's Trade Balance showed a surplus of CNY 649.34 billion in August, up from the previous CNY 601.90 billion, with exports increasing by 8.4% year-on-year.
Therefore, the AUD/USD pair strengthened following China's Trade Balance data, while expectations of an earlier RBA rate cut in February 2025 and a drop in Australian consumer confidence influenced the pair. Positive Chinese trade data supported the AUD.
AUD/USD - Technical Analysis
The AUD/USD pair is currently trading at $0.66698, up 0.08% on the day, in a consolidative pattern following a minor bullish movement.
The immediate pivot point sits at $0.6701, which aligns with the 50-day Exponential Moving Average (EMA), acting as a key resistance level.
This suggests that the pair is trading near a crucial juncture, with potential for both upward and downward movement depending on market conditions.
On the upside, immediate resistance is at $0.6720, followed by $0.6751 and a more significant barrier at $0.6793. A break above $0.6720 could fuel further bullish momentum, targeting the higher resistance levels.
However, AUD/USD would need to overcome the key pivot point at $0.6701 to signal a shift toward a sustained upward trend.
On the downside, immediate support is seen at $0.6646, followed by more substantial support at $0.6610 and $0.6580. If the pair fails to maintain its position above $0.6646, bearish sentiment may deepen, with the next target likely at $0.6610.
The Relative Strength Index (RSI) is currently at 46, signaling neutral momentum with a slight bearish tilt, which could indicate limited upward potential unless fresh catalysts emerge.
For now, AUD/USD remains neutral to slightly bullish, with the $0.6701 pivot acting as a key battleground for both bulls and bears.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD faces resistance at $0.6701; breaking above this could lead to bullish momentum.
- Immediate support lies at $0.6646, with further downside risks toward $0.6610.
- RSI of 46 shows neutral momentum, but a close watch on key support levels is crucial.
The AUD/USD pair is currently trading at $0.66698, up 0.08% on the day, in a consolidative pattern following a minor bullish movement.
The immediate pivot point sits at $0.6701, which aligns with the 50-day Exponential Moving Average (EMA), acting as a key resistance level.
This suggests that the pair is trading near a crucial juncture, with potential for both upward and downward movement depending on market conditions.
On the upside, immediate resistance is at $0.6720, followed by $0.6751 and a more significant barrier at $0.6793.
A break above $0.6720 could fuel further bullish momentum, targeting the higher resistance levels. However, AUD/USD would need to overcome the key pivot point at $0.6701 to signal a shift toward a sustained upward trend.
On the downside, immediate support is seen at $0.6646, followed by more substantial support at $0.6610 and $0.6580.
If the pair fails to maintain its position above $0.6646, bearish sentiment may deepen, with the next target likely at $0.6610.
The Relative Strength Index (RSI) is currently at 46, signaling neutral momentum with a slight bearish tilt, which could indicate limited upward potential unless fresh catalysts emerge.
For now, AUD/USD remains neutral to slightly bullish, with the $0.6701 pivot acting as a key battleground for both bulls and bears.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.66454
Take Profit – 0.67014
Stop Loss – 0.66154
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$560/ -$300
Profit & Loss Per Mini Lot = +$56/ -$30
AUD/USD Price Analysis – Sep 03, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair extended its bearish trajectory, slipping to an intra-day low of 0.6730 and hovering around the 0.6732 level. This downward movement is primarily driven by a strengthening US dollar, bolstered by upbeat US economic data and rising Treasury yields. However, the dollar's gains may be tempered by growing market expectations of a 25 basis point rate cut by the Federal Reserve in September.
Besides this, the Australian dollar faces pressure from domestic economic indicators. The unexpected decline in Australia’s Private Capital Expenditure and lower-than-anticipated CPI figures are weighing on the AUD, contributing to its weakness against the USD.
Traders are now eyeing Australia's Q2 Gross Domestic Product (GDP) and July Trade Balance data, along with a forthcoming speech by Reserve Bank of Australia (RBA) Governor Michele Bullock, for further insights into the central bank's monetary policy outlook.
US Dollar Strengthens Amid Mixed Economic Data and Rate Cut Speculation, Pressuring AUD/USD
On the US front, the broad-based US dollar strengthened as Treasury yields continued to rise. However, its gains could be limited by growing expectations that the Federal Reserve might cut interest rates by 25 basis points in September.
Traders are now looking ahead to the upcoming US employment data, especially the August Nonfarm Payrolls (NFP), for more clues on the timing and extent of potential Fed rate cuts.
Recent US economic data highlights mixed signals. The US Bureau of Economic Analysis reported that the headline Personal Consumption Expenditures (PCE) Price Index rose by 2.5% year-over-year in July, slightly below the expected 2.6%.
The core PCE, excluding food and energy, also grew by 2.6%, just shy of the 2.7% forecast. Meanwhile, US Gross Domestic Product (GDP) grew at an annualized rate of 3.0% in the second quarter, surpassing expectations.
Initial Jobless Claims fell to 231,000 for the week ending August 23, indicating a slight improvement in the labor market. However, Federal Reserve Atlanta President Raphael Bostic suggested that it might be time to consider rate cuts due to cooling inflation and rising unemployment, with his comments being rated as neutral on the hawkish-dovish scale.
Consequently, the mixed US economic data and rising Treasury yields, along with speculation about a Fed rate cut, have contributed to the US dollar's strength, putting downward pressure on the AUD/USD pair as the Australian dollar struggles to maintain its value.
Mixed Australian Economic Data Creates Uncertainty for AUD/USD Pair
On the other hand, Australia’s Building Permits surged by 10.4% month-over-month in July, recovering strongly from a 6.5% decline in June and marking the highest growth since May 2023. On an annual basis, building permits grew by 14.3%, a notable rebound from the previous 3.7% decline, indicating a positive trend in the construction sector.
However, Australia's economic outlook is mixed. Private Capital Expenditure unexpectedly dropped by 2.2% in the second quarter, reversing from a 1.9% expansion in the previous period and missing market expectations for a 1.0% increase.
This decline marks the first contraction in new capital spending since the third quarter of 2023. Additionally, Australia’s Monthly Consumer Price Index (CPI) rose by 3.5% year-on-year in July, down slightly from June's 3.8% but slightly above the expected 3.4%. Despite the decrease, this is the lowest CPI figure since March, reflecting some easing in inflation.
Traders are now watching closely for Australia's Q2 Gross Domestic Product (GDP) and July Trade Balance data, along with an upcoming speech by Reserve Bank of Australia (RBA) Governor Michele Bullock, for further clues on the central bank's approach to monetary policy.
Therefore, the mixed economic data from Australia, including a rebound in building permits and declines in capital expenditure and CPI, may create uncertainty for the AUD/USD pair. Traders will be closely watching upcoming GDP and Trade Balance reports for clearer direction.
AUD/USD - Technical Analysis
The Australian Dollar (AUD/USD) is currently trading around $0.6742, showing signs of a bearish continuation following a recent breakdown. The pair is under pressure as it trades below the key support level of $0.6754, now acting as immediate resistance. The breakdown below this level has opened the door for further declines towards the next support levels.
The pivot point for today’s session is at $0.6754, which also marks the immediate resistance. Should the pair attempt a recovery, it may find resistance at $0.6770, with the next levels of resistance at $0.6784 and $0.6793. On the downside, immediate support lies at $0.6720, followed by $0.6699 and $0.6677.
Technical indicators are pointing towards continued bearish momentum. The Relative Strength Index (RSI) is currently at 33.73, indicating oversold conditions, which could suggest a potential short-term rebound before the downtrend resumes. The 50-day Exponential Moving Average (EMA) is positioned at $0.6784, reinforcing the resistance around this level.
Given the recent price action and the technical indicators, a sell position below $0.6754 could be considered, with a take profit target at $0.6720 and a stop loss set at $0.6770 to manage risk. The breakdown below key support levels suggests that the bears are in control, and the pair could see further declines if it remains below the $0.6754 pivot point.
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GOLD Price Analysis – Sep 03, 2024
Daily Price Outlook
Gold prices (XAU/USD) continue their decline, trading around the 2490 level. However, this drop is attributed to a stronger US Dollar and rising US Treasury bond.
However, expectations of a potential US Federal Reserve (Fed) rate cut in September could support gold prices, as lower interest rates reduce the opportunity cost of holding non-yielding gold. Furthermore, ongoing geopolitical tensions in the Middle East may drive demand for gold as a safe-haven asset.
Looking ahead, the Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers Index (PMI) is set for release on Tuesday.
The key event this week will be the August US Nonfarm Payrolls (NFP) report, which could influence the Federal Reserve's decision on interest rate cuts and, in turn, affect gold prices in the short term.
Impact of Recent US Economic Data and Federal Reserve Expectations on Gold Prices
On the US front, the broad-based US dollar (USD) strengthened, and US Treasury bond yields rose on Tuesday as the US Bureau of Economic Analysis reported that the headline Personal Consumption Expenditures (PCE) Price Index increased by 2.5% year-over-year in July, matching the previous figure but missing the estimated 2.6%.
In the meantime, the core PCE, excluding food and energy, also rose by 2.6%, consistent with prior data but slightly below the forecast of 2.7%. Moreover, the US Gross Domestic Product (GDP) grew at an annualized rate of 3.0% in Q2, surpassing expectations of 2.8%. Initial Jobless Claims for the week ending August 23 fell to 231,000, slightly below the anticipated 232,000.
On the other hand, markets are currently pricing in a nearly 69% chance of a 25 basis points (bps) rate cut by the Federal Reserve in September, with a 31% probability for a 50 bps reduction.
Moving ahead, the US ISM Manufacturing PMI for August is expected to improve to 47.5 from 46.8 in July, while the Services PMI may decline to 51.1 from 51.4. Job additions for August are forecasted at 163,000, with the Unemployment Rate expected to decrease slightly to 4.2%.
Therefore, the stronger US dollar and higher Treasury yields could pressure gold prices down. However, expectations for a Fed rate cut and weaker PMI data might support gold, as lower rates reduce the opportunity cost of holding non-yielding assets.
GOLD (XAU/USD) - Technical Analysis
Gold is currently trading around $2,503, facing a critical juncture on the 2-hour chart. After breaking down from an ascending triangle pattern, the price has been hovering near the $2,503 level, struggling to reclaim its previous bullish momentum. This breakdown is significant as the ascending triangle was providing support around the $2,507 level, and the recent price action suggests that the bears are gaining control.
On the technical front, the pivot point is situated at $2,507, which is now acting as a critical resistance. Immediate resistance stands at $2,508, followed by stronger resistance levels at $2,514 and $2,517. On the downside, the immediate support is at $2,491, with subsequent support levels at $2,480 and $2,471. The 50 EMA, currently positioned at $2,508, is acting as a ceiling for the price, preventing any meaningful recovery.
The Relative Strength Index (RSI) is currently at 44.41, indicating neutral momentum but with a slight tilt towards oversold conditions. This could imply a potential reversal or consolidation phase if the selling pressure continues to mount. However, the key to watch is whether the price can break back above the 50 EMA at $2,508, which could signal a shift in momentum.
In conclusion, Gold's recent breakdown from the ascending triangle pattern around the $2,507 mark has opened the door for further downside potential. If the price remains below $2,507, the bearish momentum could accelerate, targeting the next support at $2,491 and potentially down to $2,480 or even $2,471.
Conversely, a recovery above $2,508 could challenge resistance levels at $2,514 and $2,517. For traders, an entry point could be considered at a sell position below $2,507, with a take profit target set at $2,492 and a stop loss at $2,517 to manage risk effectively.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD is trading below the key support of $0.6754, now acting as resistance.
- RSI at 33.73 indicates oversold conditions, signaling potential short-term rebounds.
- Bearish momentum could continue towards $0.6720 and beyond if selling pressure persists.
The Australian Dollar (AUD/USD) is currently trading around $0.6742, showing signs of a bearish continuation following a recent breakdown. The pair is under pressure as it trades below the key support level of $0.6754, now acting as immediate resistance. The breakdown below this level has opened the door for further declines towards the next support levels.
The pivot point for today’s session is at $0.6754, which also marks the immediate resistance. Should the pair attempt a recovery, it may find resistance at $0.6770, with the next levels of resistance at $0.6784 and $0.6793. On the downside, immediate support lies at $0.6720, followed by $0.6699 and $0.6677.
Technical indicators are pointing towards continued bearish momentum. The Relative Strength Index (RSI) is currently at 33.73, indicating oversold conditions, which could suggest a potential short-term rebound before the downtrend resumes. The 50-day Exponential Moving Average (EMA) is positioned at $0.6784, reinforcing the resistance around this level.
Given the recent price action and the technical indicators, a sell position below $0.6754 could be considered, with a take profit target at $0.6720 and a stop loss set at $0.6770 to manage risk. The breakdown below key support levels suggests that the bears are in control, and the pair could see further declines if it remains below the $0.6754 pivot point.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.67540
Take Profit – 0.67200
Stop Loss – 0.67700
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$340/ -$160
Profit & Loss Per Mini Lot = +$34/ -$16
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bullish Momentum: Trading above the 50-day EMA at $0.6780, indicating short-term strength.
- Resistance Levels: Immediate resistance at $0.6831, with further targets at $0.6849 and $0.6869.
- Support Levels: Critical support lies at $0.6773, with additional support at $0.6752 and $0.6728.
The AUD/USD pair is currently trading at $0.68066, reflecting a 0.26% increase as the Australian Dollar gains traction against the U.S. Dollar.
The pair is showing a bullish bias, comfortably trading above the 50-day Exponential Moving Average (EMA) positioned at $0.6780.
This moving average serves as a key support level, indicating that buyers have control in the short term.
The pivot point for the day is set at $0.6831, which also aligns with the first level of immediate resistance. A break above this resistance could open the door for further gains, with the next resistance targets at $0.6849 and $0.6869.
The Relative Strength Index (RSI) is currently at 60, suggesting a strong but not overextended momentum. This indicates that there’s room for the AUD/USD pair to climb higher before reaching overbought conditions.
On the downside, immediate support is seen at $0.6773, just below the 50-day EMA. Should the pair drop below this level, additional support is found at $0.6752 and $0.6728.
A break below these levels would likely shift the momentum to bearish, potentially inviting further declines.
For traders considering entering the market, an entry above $0.67955 looks favorable, with a take-profit target at $0.68312.
A stop-loss at $0.67732 is recommended to limit downside risk. Overall, while the short-term outlook remains bullish, traders should keep an eye on key resistance levels and the RSI for any signs of a reversal.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.67955
Take Profit – 0.68312
Stop Loss – 0.67732
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$357/ -$223
Profit & Loss Per Mini Lot = +$35/ -$22
AUD/USD Price Analysis – Aug 29, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair maintained its upward trend and remained well bid around the 0.6821 level, hitting an intra-day high of 0.6825.
This upward trend can be attributed to several factors, including a bearish US dollar, which lost traction due to the US Federal Reserve signaling that lower interest rates are likely on the horizon.
Additionally, hotter-than-expected Australian CPI inflation data have pushed back expectations of a rate cut by the Reserve Bank of Australia (RBA), providing some support to the Aussie.
Traders are now looking ahead to US Jobless Claims and Gross Domestic Product (GDP) data, set to be released on Thursday, for more clarity on the projected path of US interest rates.
Australian Dollar Strengthens Amid Mixed Economic Signals
On the AUD front, the Australian dollar (AUD) gained strength against the US dollar (USD) following hotter-than-expected inflation data. The country’s Consumer Price Index (CPI) eased to 3.5% in July from 3.8% in June, matching forecasts.
This unexpected inflation level led investors to push back their expectations for a Reserve Bank of Australia (RBA) rate cut, providing support to the AUD/USD pair.
In addition, Australia’s private capital spending fell by 2.2% in Q2, a sharp decline from a 1.0% increase in the previous quarter and worse than the 1.0% growth expected.
Spending on buildings and structures dropped by 3.8%, and plant and machinery saw a 0.5% decline. Investors are now looking to Australian Retail Sales data, due on Friday, for further guidance.
Therefore, the stronger-than-expected Australian CPI data reduced rate cut expectations, supporting the AUD.
However, the drop in private capital spending could weigh on the currency. Overall, the AUD/USD pair may see mixed signals with inflation supporting the Aussie and spending data dampening sentiment.
Impact of US Economic Data and Fed Signals on the AUD/USD Pair
On the US front, the Federal Reserve (Fed) is signaling that lower interest rates might be on the way, putting pressure on the US dollar (USD). Fed Chair Jerome Powell mentioned at Jackson Hole that it’s time for policy adjustments, influenced partly by weakness in the job market.
The upcoming US Nonfarm Payrolls report for August will be crucial, as it could provide insights into the labor market's health and impact the Fed's decision on interest rates.
The upcoming data is crucial for the AUD/USD pair. If the jobs report reveals further weakness or if GDP growth disappoints, it could lead to a weaker USD.
Additionally, the core Personal Consumption Expenditures (PCE) Price Index will be released on Friday, and if it rises to 2.7% as expected, it might lead the Fed to keep interest rates higher for longer, potentially strengthening the USD.
Conversely, lower-than-expected inflation could weaken the USD, supporting the Australian dollar. The AUD/USD pair is likely to react to these developments, with USD weakness providing potential support to the Aussie.
AUD/USD - Technical Analysis
The AUD/USD pair is currently trading at $0.68066, reflecting a 0.26% increase as the Australian Dollar gains traction against the U.S. Dollar.
The pair is showing a bullish bias, comfortably trading above the 50-day Exponential Moving Average (EMA) positioned at $0.6780. This moving average serves as a key support level, indicating that buyers have control in the short term.
The pivot point for the day is set at $0.6831, which also aligns with the first level of immediate resistance. A break above this resistance could open the door for further gains, with the next resistance targets at $0.6849 and $0.6869.
The Relative Strength Index (RSI) is currently at 60, suggesting a strong but not overextended momentum.
This indicates that there’s room for the AUD/USD pair to climb higher before reaching overbought conditions.
On the downside, immediate support is seen at $0.6773, just below the 50-day EMA. Should the pair drop below this level, additional support is found at $0.6752 and $0.6728. A break below these levels would likely shift the momentum to bearish, potentially inviting further declines.
For traders considering entering the market, an entry above $0.67955 looks favorable, with a take-profit target at $0.68312.
A stop-loss at $0.67732 is recommended to limit downside risk. Overall, while the short-term outlook remains bullish, traders should keep an eye on key resistance levels and the RSI for any signs of a reversal.
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