Technical Analysis

AUD/USD Price Analysis – June 6, 2024

By LonghornFX Technical Analysis
Jun 6, 20243 min

Daily Price Outlook

During the European trading session, the AUD/USD currency pair maintained its upward trend and remained well bid around the 0.6650 level, hitting the intraday high of 0.6683 level.

The reason for its upward trend could be tied to a hawkish statement by Reserve Bank of Australia (RBA) Governor Michele Bullock on Wednesday. Moreover, the previously released upbeat Trade Balance data in Australia was seen as another key factor that kept the AUD/USD pair higher.

On the other side, the broad-based US dollar bearish bias, driven by the Fed rate cut, has played its major role in supporting the AUD/USD pair's gains. Moving ahead, traders seem cautious to place any strong positions ahead of the release of US employment data on Friday, including Average Hourly Earnings and Nonfarm Payrolls.

AUD/USD Strengthens Despite Economic Data Disappointments

On the AUD front, the upticks in the AUD/USD pair were bolstered further after the hawkish statement from Reserve Bank of Australia (RBA) Governor Michele Bullock on Wednesday.

Bullock hinted at possible interest rate hikes if the Consumer Price Index (CPI) doesn't rebound to the target range of 1%-3%. She also noted a slight easing in the labor market, as reported by NCA NewsWire.

These remarks suggest a proactive stance from the RBA to maintain economic stability, which could bolster confidence in the Australian Dollar. Additionally, any positive developments in the CPI and labor market could further support the currency's upward momentum.

On the data front, Australia's Gross Domestic Product (GDP) released on Wednesday showed modest growth of 0.1% in the first quarter, below the expected 0.2%. Annually, the economy expanded by 1.1%, slightly lower than the anticipated 1.2%.

Judo Bank's Purchasing Managers Index (PMI) for May was 52.5, falling short of the expected 53.1, while the Composite PMI dipped slightly to 52.1 from April's 53.0, indicating a slower growth rate in Australia's private sector output for the fourth consecutive month.

Therefore, the AUD/USD pair strengthened on RBA Governor Bullock's hawkish tone, despite Australia's lower-than-expected GDP growth and weaker PMI figures, signaling ongoing investor confidence in the Australian Dollar.

AUD/USD Price Chart - Source: Tradingview
AUD/USD Price Chart - Source: Tradingview

AUD/USD - Technical Analysis

AUD/USD is currently trading at $0.66443, reflecting a modest 0.12% increase on a four-hour chart timeframe. The pivot point is set at $0.6702, serving as a critical marker for potential price movements.

Immediate resistance is identified at $0.6699, with subsequent levels at $0.6735 and $0.6771. On the downside, immediate support is found at $0.6591, followed by $0.6559 and $0.6528.

The Relative Strength Index (RSI) is at 46, indicating neutral momentum, suggesting neither overbought nor oversold conditions. The 50-day Exponential Moving Average (EMA) is positioned at $0.6648, just above the current price, which implies a slight bearish pressure in the short term.

In conclusion, the AUD/USD pair shows potential for bullish movement above $0.66320. Traders are advised to consider buying at or above this level with a target price of $0.67024. A stop loss should be set at $0.65923 to manage potential downside risks.

The current technical indicators and key price levels suggest a cautious but optimistic outlook for buyers, especially if the price stays above the pivot point of $0.6702.

However, if the price falls below immediate support at $0.6591, it may signal a shift to a bearish trend, warranting close monitoring of subsequent support levels.

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