AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD price at $0.65453, down 0.48%, with key support at $0.6517.
- RSI at 19 indicates AUD/USD is oversold, suggesting potential for reversal or consolidation.
- 50 EMA at $0.6683, with current price below, signaling continued bearish trend.
The Australian dollar (AUD/USD) declined by 0.48%, settling at $0.65453 in recent trading sessions. This downward movement places the currency pair in a delicate position as it hovers near significant technical levels. Traders and analysts are keenly observing these levels to gauge potential future movements.
The pivot point at $0.6517 is a critical marker for traders. Immediate resistance is seen at $0.6592. A break above this could push the AUD/USD towards the next resistance levels at $0.6636 and $0.6682.
On the downside, the immediate support lies at $0.6517. Further declines could find additional support at $0.6491 and $0.6465, which are vital for preventing a deeper sell-off.
Technical indicators offer a mixed outlook. The Relative Strength Index (RSI) is notably low at 19, suggesting that the AUD/USD is in oversold territory. This could imply a potential reversal or a consolidation phase in the near term as the market corrects the oversold conditions.
The 50-day Exponential Moving Average (EMA) stands at $0.6683, indicating a bearish trend as the current price remains well below this level. A sustained move below the 50 EMA often signals continued downward momentum, adding pressure on the AUD/USD.
In conclusion, the recommendation is to consider short positions below $0.65580, targeting $0.65166 for profit-taking with a stop loss set at $0.65828.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.65580
Take Profit – 0.65166
Stop Loss – 0.65828
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$414/ -$248
Profit & Loss Per Mini Lot = +$41/ -$24
AUD/USD Price Analysis – July 25, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair failed to stop its downward trend and remained well offered around the 0.6527 level, hitting an intra-day low of 0.6519.
The downward rally can be attributed to the weak economic outlooks for China and Australia, which have dampened the Australian dollar and contributed to the AUD/USD pair's losses.
In contrast, the bearish US dollar, driven by increasing expectations that the Federal Reserve (Fed) will cut interest rates multiple times before the year's end, has helped the AUD/USD pair to limit its losses.
Australian Dollar Under Pressure from China’s Economic Slowdown and Weak Market Sentiment
On the AUD front, The Australian Dollar (AUD) is under pressure due to concerns about China's economic slowdown. China's recent decision to cut its Loan Prime Rate (LPR) by 10 basis points, coupled with a lack of strong growth measures, has raised fears about the country's economic health.
This is significant for Australia, as the AUD often mirrors China's economic conditions and Australia heavily depends on iron ore exports to China.
With global iron ore prices falling to a three-week low and anticipated declines in foreign investment in Australia, the AUD faces further challenges. Additionally, weak market sentiment before the US Q2 GDP report and nominal losses in S&P 500 futures compound the AUD's difficulties.
Impact of US Economic Data and Outlook on AUD/USD
On the US front, the US Dollar is falling but remains above the key support level of 104.00. However, the US economy is growing at a solid 2.0% annual rate, up from the previous 1.4%, although the GDP Price Index has slowed to 3.6% from 3.1%. This could lead to early rate cuts by the Federal Reserve.
It should be noted that the recent S&P Global PMI data for July is somewhat positive, suggesting that the economy is doing well with controlled inflation, though rising costs for materials and labor might impact prices and profit margins.
Despite the expectation of Fed rate cuts, gold prices are declining due to a stronger economic outlook and higher production costs.
The S&P Global Composite PMI improved to 55, showing overall growth, while the Manufacturing PMI fell to 49.5, indicating slower manufacturing, and the Services PMI rose to 56.0, reflecting stronger growth in services.
Therefore, the Australian Dollar (AUD) may weaken against the US Dollar (USD) as improved US economic data and a stronger outlook overshadow expectations of Fed rate cuts, impacting AUD/USD negatively.
AUD/USD - Technical Analysis
The Australian dollar (AUD/USD) declined by 0.48%, settling at $0.65453 in recent trading sessions. This downward movement places the currency pair in a delicate position as it hovers near significant technical levels. Traders and analysts are keenly observing these levels to gauge potential future movements.
The pivot point at $0.6517 is a critical marker for traders. Immediate resistance is seen at $0.6592. A break above this could push the AUD/USD towards the next resistance levels at $0.6636 and $0.6682.
On the downside, the immediate support lies at $0.6517. Further declines could find additional support at $0.6491 and $0.6465, which are vital for preventing a deeper sell-off.
Technical indicators offer a mixed outlook. The Relative Strength Index (RSI) is notably low at 19, suggesting that the AUD/USD is in oversold territory. This could imply a potential reversal or a consolidation phase in the near term as the market corrects the oversold conditions.
The 50-day Exponential Moving Average (EMA) stands at $0.6683, indicating a bearish trend as the current price remains well below this level. A sustained move below the 50 EMA often signals continued downward momentum, adding pressure on the AUD/USD.
In conclusion, the recommendation is to consider short positions below $0.65580, targeting $0.65166 for profit-taking with a stop loss set at $0.65828.
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AUD/USD Price Analysis – July 23, 2024
Daily Price Outlook
Despite the risk-on market sentiment and potential rate hike from the RBA, the AUD/USD currency pair failed to halt its seventh consecutive session of decline and remained under pressure around the 0.6625 level, hitting an intraday low of 0.6621. This decline is attributed to the sharp drop in energy and metal prices.
Additionally, a weak outlook for the Chinese economy has led to copper prices hitting their lowest point in over three months and caused a decline in iron ore prices, further pressuring the Australian Dollar.
Conversely, the bearish US dollar, influenced by growing expectations of a Federal Reserve rate cut in September, has helped limit further losses in the AUD/USD pair. The Australian Dollar may receive some support from strong employment data, which suggest a tight labor market and raise the possibility of an interest rate hike from the RBA.
Investors are also awaiting Australian manufacturing and services PMI figures this week to assess the health of the economy.
Weak Chinese Economy and PBoC Rate Cuts Pressure AUD/USD Through Falling Commodity Prices
It is important to highlight that the weak outlook for the Chinese economy has driven copper prices to their lowest levels in over three months and caused a decline in iron ore prices, adding pressure to the Australian Dollar.
The People's Bank of China (PBoC) has reduced the one- and five-year loan prime rates by ten basis points, to 3.35% and 3.85%, respectively.
This adjustment could impact Australian markets due to their strong trade ties with China. Additionally, China's $715 billion hedge fund industry is bracing for stricter regulations next month, requiring higher asset thresholds and stricter investment and marketing rules, prompting some firms to seek more capital.
Therefore, the weak Chinese economic outlook and PBoC rate cuts could negatively impact the AUD/USD pair due to Australia's trade ties with China and pressure from falling commodity prices.
Strong Australian Employment Data and Potential RBA Rate Hike May Support AUD
Conversely, the Australian Dollar could receive support from robust employment data, which indicates a tight labor market and increases the likelihood of an interest rate hike from the Reserve Bank of Australia (RBA).
Investors are also looking forward to Australian manufacturing and services PMI figures this week to gauge the overall health of the economy.
Sean Langcake from Oxford Economics Australia observed that the current job growth reflects strong demand and ongoing cost pressures, suggesting that the RBA may keep rates steady. However, he noted that an August rate hike remains a possibility.
On the data front, the Australian Bureau of Statistics reported that Employment Change rose by 50,200 in June, well above the market forecast of 20,000. This strong job growth signals a robust labor market and could influence the Reserve Bank of Australia's interest rate decisions.
Therefore, the strong employment data and potential interest rate hike from the RBA could support the AUD, potentially strengthening the AUD/USD pair, especially if the upcoming PMI figures also show positive trends.
US Dollar Pressured by Fed Rate Cut Expectations and Market Reactions
On the US front, the decline in the AUD/USD pair may be short-lived due to the US Dollar facing pressure from expectations of a Federal Reserve rate cut in September. Fed Chair Jerome Powell and other officials have suggested that lower interest rates could be on the horizon due to recent progress on inflation.
Additionally, the market’s limited reaction to President Biden's withdrawal from the 2024 election is impacting the USD. Investors are increasingly focusing on potential benefits from Donald Trump's policies, despite concerns about higher inflation.
These shifts in investor sentiment and inflation expectations are likely to influence both currencies and impact the AUD/USD pair.
AUD/USD - Technical Analysis
The AUD/USD pair is trading at $0.66296, down 0.17% for the day. The 4-hour chart indicates a bearish trend, with the pivot point set at $0.6646. This level is crucial for determining the market's direction. If the price stays below this pivot point, the bearish trend is expected to continue.
Immediate resistance is found at $0.6670, followed by $0.6691 and $0.6716. These levels act as potential barriers to any upward movement. On the downside, immediate support is seen at $0.6621, with further support at $0.6602 and $0.6577, which could provide potential entry points for long positions if the price rebounds.
The Relative Strength Index (RSI) is at 19, indicating that the AUD/USD is in oversold territory. This suggests that a rebound could be imminent, although the overall trend remains bearish. The 50-day Exponential Moving Average (EMA) is at $0.6704, which supports the bearish outlook as long as the price remains below this level.
Given the technical indicators, the suggested trading strategy is to sell below $0.66453, with a take profit target at $0.66104 and a stop loss at $0.66691. This strategy aligns with the current bearish sentiment and key resistance and support levels.
In conclusion, AUD/USD's outlook remains bearish below the pivot point of $0.6646. Traders should monitor these key levels and technical indicators closely to adjust their strategies accordingly. A break above the pivot point could indicate a shift towards a bullish trend, while maintaining below it supports the bearish trend.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate resistance at $0.6670, next at $0.6691, and $0.6716.
- Immediate support at $0.6621, next at $0.6602, and $0.6577.
- RSI at 19, indicating oversold conditions.
The AUD/USD pair is trading at $0.66296, down 0.17% for the day. The 4-hour chart indicates a bearish trend, with the pivot point set at $0.6646. This level is crucial for determining the market's direction. If the price stays below this pivot point, the bearish trend is expected to continue.
Immediate resistance is found at $0.6670, followed by $0.6691 and $0.6716. These levels act as potential barriers to any upward movement. On the downside, immediate support is seen at $0.6621, with further support at $0.6602 and $0.6577, which could provide potential entry points for long positions if the price rebounds.
The Relative Strength Index (RSI) is at 19, indicating that the AUD/USD is in oversold territory. This suggests that a rebound could be imminent, although the overall trend remains bearish. The 50-day Exponential Moving Average (EMA) is at $0.6704, which supports the bearish outlook as long as the price remains below this level.
Given the technical indicators, the suggested trading strategy is to sell below $0.66453, with a take profit target at $0.66104 and a stop loss at $0.66691. This strategy aligns with the current bearish sentiment and key resistance and support levels.
In conclusion, AUD/USD's outlook remains bearish below the pivot point of $0.6646. Traders should monitor these key levels and technical indicators closely to adjust their strategies accordingly.
A break above the pivot point could indicate a shift towards a bullish trend, while maintaining below it supports the bearish trend.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.66453
Take Profit – 0.66104
Stop Loss – 0.66691
Risk to Reward – 1: 1.4
Profit & Loss Per Standard Lot = +$349/ -$238
Profit & Loss Per Mini Lot = +$34/ -$23
AUD/USD Price Analysis – July 18, 2024
Daily Price Outlook
Despite the renewed strength of the US dollar, the AUD/USD currency pair was able to maintain its upward trend and remained well-bid around the 0.6736 level, hitting an intra-day high of 0.6744.
The reason for this upward rally can be attributed to the previously released stronger domestic jobs report, which supports the case for another possible rate hike by the Reserve Bank of Australia (RBA).
This underpinned the Australian currency. Additionally, the risk-on sentiment in the market was seen as another key factor that underpinned the riskier Australian dollar and contributed to the AUD/USD pair's gains.
On the other hand, the US dollar managed to stop its early-day losses and gained positive traction, which was seen as a key factor that kept the lid on any additional gains in the AUD/USD pair. Meanwhile, the rising economic headwinds in China, along with falling copper prices, also capped gains in the AUD/USD pair.
AUD/USD Supported by Stronger Jobs Report Despite Higher Unemployment Rate
On the AUD front, its rise is backed by a stronger domestic jobs report, suggesting the potential for another rate hike by the Reserve Bank of Australia (RBA). Although the mixed data hasn't significantly changed expectations for the RBA's next policy move, it has modestly boosted the Australian Dollar and supported the AUD/USD pair.
On the data front, the Australian Bureau of Statistics (ABS) released figures this Thursday indicating that the Unemployment Rate increased to 4.1% in June, slightly higher than both expectations and the previous 4.0% figure.
However, this disappointment was mitigated by a surprise uptick in the number of employed individuals, rising from 39.7K in May to 50.2K in June, well surpassing the anticipated 20.0K increase according to consensus estimates.
Therefore, the AUD/USD pair was modestly supported by a stronger jobs report despite a higher unemployment rate. The unexpected increase in employed individuals helped offset concerns, influencing the pair's stability.
Impact of Fed's Inflation Optimism and Rate Cut Speculation on USD and AUD/USD Pair
On the US economic front, the Federal Reserve has expressed optimism regarding inflation reaching its targets, which has led to speculation about potential interest rate cuts.
Fed Governor Christopher Waller and Richmond Fed President Thomas Barkin have noted a moderation in inflationary pressures, prompting market expectations for a 25-basis point rate cut in September to rise sharply to 93.5%, up from 69.7% previously.
Recent economic data shows that US Retail Sales for June held steady at $704.3 billion, meeting market expectations after a revised 0.3% increase in May.
Looking forward, upcoming reports are expected to show a rise in weekly jobless claims, alongside a moderate improvement in the Philadelphia Fed manufacturing index.
As a result, the Federal Reserve's positive outlook on inflation and potential rate cuts has bolstered the US dollar, exerting downward pressure on AUD/USD.
Market attention is now keenly fixed on upcoming US economic data releases, which are expected to sway the pair's trajectory amidst heightened speculation over rate cuts.
AUD/USD - Technical Analysis
The AUD/USD pair is trading at $0.67391, up 0.13%, reflecting a modest uptick amidst a broader market stability. The 4-hour chart reveals critical levels that traders should monitor. The pivot point is set at $0.6745, indicating a pivotal area for potential price action shifts.
Immediate resistance stands at $0.6760, followed by stronger resistance at $0.6778 and $0.6799. Conversely, immediate support is located at $0.6716, with further support levels at $0.6702 and $0.6685.
The Relative Strength Index (RSI) is at 48, suggesting a neutral market sentiment with neither overbought nor oversold conditions. This positioning implies potential for either upward or downward movements depending on forthcoming economic data and market reactions.
Additionally, the 50-day Exponential Moving Average (EMA) is positioned at $0.6750, slightly above the current price, indicating a need for a sustained move above this level to confirm a bullish trend.
For traders, a strategic entry point would be above $0.67168, aiming for a take profit level at $0.67595. Setting a stop loss at $0.66953 is advisable to mitigate potential downside risks. This approach leverages the modest bullish momentum while ensuring protection against unexpected market shifts.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD trades at $0.67391, up 0.13%, showing modest gains amid market stability.
- RSI at 48 indicates neutral conditions; potential for either upward or downward movements.
- Buy above $0.67168 with take profit at $0.67595 and stop loss at $0.66953.
The AUD/USD pair is trading at $0.67391, up 0.13%, reflecting a modest uptick amidst a broader market stability. The 4-hour chart reveals critical levels that traders should monitor. The pivot point is set at $0.6745, indicating a pivotal area for potential price action shifts.
Immediate resistance stands at $0.6760, followed by stronger resistance at $0.6778 and $0.6799. Conversely, immediate support is located at $0.6716, with further support levels at $0.6702 and $0.6685.
The Relative Strength Index (RSI) is at 48, suggesting a neutral market sentiment with neither overbought nor oversold conditions. This positioning implies potential for either upward or downward movements depending on forthcoming economic data and market reactions.
Additionally, the 50-day Exponential Moving Average (EMA) is positioned at $0.6750, slightly above the current price, indicating a need for a sustained move above this level to confirm a bullish trend.
For traders, a strategic entry point would be above $0.67168, aiming for a take profit level at $0.67595. Setting a stop loss at $0.66953 is advisable to mitigate potential downside risks. This approach leverages the modest bullish momentum while ensuring protection against unexpected market shifts.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.67168
Take Profit – 0.67595
Stop Loss – 0.66953
Risk to Reward – 1: 1.9
Profit & Loss Per Standard Lot = +$427/ -$215
Profit & Loss Per Mini Lot = +$42/ -$21
AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD down 0.17%, trading at $0.67365 amid bearish momentum.
- Immediate resistance at $0.68; support levels at $0.6710, $0.6690, $0.6670.
- RSI at 30 indicates potential oversold conditions; 50-day EMA at $0.68.
The Australian Dollar (AUD/USD) is currently trading at $0.67365, down 0.17% from the previous session. The 4-hour chart highlights key price levels, with the pivot point set at $0.67. Immediate resistance is observed at $0.68, followed by further resistance levels at $0.6825 and $0.6850.
On the downside, immediate support is noted at $0.6710, with additional support at $0.6690 and $0.6670.
The Relative Strength Index (RSI) stands at 30, indicating that the pair is approaching oversold conditions. This could suggest a potential rebound if the bearish momentum begins to wane. The 50-day Exponential Moving Average (EMA) is positioned at $0.68, providing a key resistance level that the price must overcome to shift towards a more bullish outlook.
The recent decline in the AUD/USD can be attributed to a strengthening U.S. dollar, driven by positive economic data and market expectations of future interest rate hikes by the Federal Reserve.
Additionally, weaker commodity prices and concerns over China's economic slowdown have put additional pressure on the Australian Dollar, which is heavily influenced by global commodity demand.
Traders looking to capitalize on the current downtrend should consider entering short positions below $0.67468, with a take-profit target at $0.67212 and a stop-loss set at $0.67622. This strategy aims to benefit from continued bearish momentum while managing potential risks effectively.
AUD/USD - Trade Ideas
Entry Price – Sell Below 0.67468
Take Profit – 0.67212
Stop Loss – 0.67622
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$256/ -$154
Profit & Loss Per Mini Lot = +$25/ -$15
AUD/USD Price Analysis – July 16, 2024
Daily Price Outlook
During the European trading session, the AUD/USD pair continued its bearish trend, remaining under pressure around the 0.6744 level and hitting an intraday low of 0.6732. The downward movement can be attributed to the strength of the US dollar, which gained ground despite dovish comments from Federal Reserve Chair Jerome Powell on monetary policy.
The dollar's rise was fueled by recent events, including an unsuccessful attempt on Donald Trump's life, which has boosted his prospects for the 2024 presidential election and raised expectations of fewer regulations under his potential leadership.
Moving ahead, traders will keep their eyes on Australia's June Employment data, set for release on Thursday. Economists predict around 20,000 new jobs were added, down from 39,700 in May.
The Unemployment Rate is expected to hold steady at 4.0%. Strong signs of a tight labor market could raise expectations for further tightening by the Reserve Bank of Australia (RBA). Currently, investors anticipate the RBA may follow the global trend of rate cuts next year.
Impact of US Dollar Strength on AUD/USD Amid Political and Economic Expectations
On the US front, the broad-based US dollar gained positive traction and remained bullish as the recent events, including an unsuccessful attempt on Donald Trump's life, have bolstered his prospects for winning the 2024 presidential election, sparking hopes of reduced regulations under his potential leadership.
Moreover, the US dollar has strengthened on expectations that Trump's policies could lead to higher government debt and inflation.
Therefore, the US dollar's bullish sentiment, bolstered by events like an unsuccessful attempt on Donald Trump's life and expectations of reduced regulations and higher debt, has strengthened against the Australian dollar (AUD/USD), likely pushing the pair lower amid increased risk aversion and dollar demand.
US Dollar Strength and Fed's Policy Signals Impact on AUD/USD Pair
On the US front, Federal Reserve Chair Jerome Powell's dovish comments on Monday bolstered the US dollar against the Australian dollar (AUD/USD). His confidence in inflation nearing the Fed's target sustainably has raised expectations of potential interest rate cuts. This outlook has capped gains in the US dollar, potentially helping the AUD/USD pair to limit its deeper losses.
Meanwhile, Fed Bank of San Francisco President Mary Daly highlighted a cooling inflation trend, suggesting that inflation is on track toward the Fed's 2% target.
She emphasized the importance of gathering more data before making decisions on interest rates. Market sentiment, as reflected in CME Group’s FedWatch Tool, now indicates an 85.7% probability of a 25-basis point rate cut in September, up from 71.0% reported last week.
Hence, Federal Reserve Chair Jerome Powell's dovish comments on Monday capped gains in the US dollar against the Australian dollar (AUD/USD). His confidence in inflation nearing the Fed's target sustainably has raised expectations of potential interest rate cuts, influencing the pair's movements.
AUD/USD - Technical Analysis
The Australian Dollar (AUD/USD) is currently trading at $0.67365, down 0.17% from the previous session. The 4-hour chart highlights key price levels, with the pivot point set at $0.67. Immediate resistance is observed at $0.68, followed by further resistance levels at $0.6825 and $0.6850.
On the downside, immediate support is noted at $0.6710, with additional support at $0.6690 and $0.6670.
The Relative Strength Index (RSI) stands at 30, indicating that the pair is approaching oversold conditions.
This could suggest a potential rebound if the bearish momentum begins to wane. The 50-day Exponential Moving Average (EMA) is positioned at $0.68, providing a key resistance level that the price must overcome to shift towards a more bullish outlook.
The recent decline in the AUD/USD can be attributed to a strengthening U.S. dollar, driven by positive economic data and market expectations of future interest rate hikes by the Federal Reserve.
Additionally, weaker commodity prices and concerns over China's economic slowdown have put additional pressure on the Australian Dollar, which is heavily influenced by global commodity demand.
Traders looking to capitalize on the current downtrend should consider entering short positions below $0.67468, with a take-profit target at $0.67212 and a stop-loss set at $0.67622. This strategy aims to benefit from continued bearish momentum while managing potential risks effectively.
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Daily Price Outlook
During the European trading session, the AUD/USD currency pair maintained its upward momentum, staying strong around the 0.6759 level and peaking at an intraday high of 0.6764. This upward movement can be attributed to several factors.
Firstly, there is increasing speculation that the Reserve Bank of Australia (RBA) may postpone joining the global trend of interest rate cuts or even consider raising rates, which has bolstered demand for the Australian dollar and supported gains in AUD/USD.
Secondly, weakness in the US dollar also contributed as market expectations lean towards the Federal Reserve initiating interest rate cuts starting in September, undermining the greenback's strength.
Looking ahead, traders are exercising caution in taking significant positions as they await the release of the latest consumer inflation figures from the United States (US).
The upcoming US CPI report is expected to be closely monitored for insights into the Federal Reserve's approach to potential rate cuts, which could influence demand for the US dollar and significantly impact commodity markets.
Impact of Economic Data and Speculation on AUD/USD Pair
Despite soft Consumer Inflation Expectations reported by the Melbourne Institute for July, reflecting subdued consumer outlook on inflation over the next year, the AUD/USD pair has displayed upward movement.
This rise can be attributed to increasing speculation that the Reserve Bank of Australia (RBA) may delay joining the global trend of interest rate cuts or possibly even consider raising rates again.
Recent data indicates a decline in Australian consumer confidence for July, contrasting with a surge in business sentiment to a 17-month high in June, highlighting divergent economic outlooks.
On the data front, Australia's Consumer Inflation Expectations for July eased slightly to 4.3% from the previous 4.4%. Meanwhile, China, a key trade partner, reported a 0.2% annual increase in its Consumer Price Index (CPI) for June, down from 0.3% in May and below market expectations of 0.4%.
On a monthly basis, Chinese CPI declined by 0.2% in June, contrasting with a 0.1% decrease in May and missing the anticipated 0.1% drop.
Additionally, Australia's Westpac Consumer Confidence fell by 1.1% in July following a 1.7% increase in June, marking the fifth decline this year amid concerns over elevated inflation, interest rates, and economic growth.
Therefore, the AUD/USD pair exhibited upward movement, driven by speculation that the RBA may postpone rate cuts or even consider raising rates. The contrasting economic outlooks, with lower consumer confidence but higher business sentiment, also played a role in shaping its trajectory.
Impact of Fed Expectations and CPI Data on AUD/USD Pair
On the US front, the broad-based US dollar continues to weaken and remains bearish amid mounting expectations that the Federal Reserve will commence interest rate cuts starting in September, potentially followed by additional cuts in December.
Fed Chair Jerome Powell's recent remarks have underscored this sentiment, highlighting the Fed's commitment to maintaining price stability and contemplating a move towards neutral interest rates by late 2024 as inflation trends evolve. Despite acknowledging signs of economic moderation,
On the data front, the headline Consumer Price Index (CPI) is anticipated to have risen by 0.1% in June, marking a slight easing in the annual rate from 3.3% to 3.1%. Meanwhile, Core CPI, which excludes Food and Energy prices, is expected to maintain a steady year-over-year rate of 3.4%.
Therefore, the AUD/USD pair could find support as the US dollar weakens due to expectations of Federal Reserve rate cuts, bolstered by Chair Powell's comments on stable inflation and possible interest rate adjustments. Economic data indicating moderated CPI rates in the US could further impact market sentiment.
AUD/USD - Technical Analysis
The Australian dollar is showing signs of strength against the U.S. dollar, trading up 0.16% at $0.6758. A closer look at the 4-hour chart reveals a bullish bias, with the Aussie perched just above a pivot point of $0.6752.
This level now serves as a crucial support zone, with a break below potentially triggering a move towards the next support levels at $0.6732, $0.6712, and $0.6697.
Conversely, the bulls have their eyes on the immediate resistance at $0.6767. A decisive move above this level could open the door for a rally towards the next resistance targets at $0.6787 and $0.6804.
The 50-day Exponential Moving Average (EMA), currently at $0.6742, is also acting as dynamic support, further reinforcing the bullish outlook.
The Relative Strength Index (RSI) is currently at 64, suggesting some room for further upside before entering overbought territory. However, traders should remain vigilant for any signs of exhaustion or reversal in momentum.
Given the current technical setup, traders could consider initiating long positions above $0.67518, with a stop-loss order placed below $0.67321. The initial target for profit-taking would be the resistance level at $0.67870.
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AUD/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- AUD/USD trades above key pivot point, indicating bullish bias.
- Resistance levels at $0.6767, $0.6787, and $0.6804 pose upside potential.
- RSI suggests some room for further upside, but traders should watch for signs of reversal.
The Australian dollar is showing signs of strength against the U.S. dollar, trading up 0.16% at $0.6758. A closer look at the 4-hour chart reveals a bullish bias, with the Aussie perched just above a pivot point of $0.6752.
This level now serves as a crucial support zone, with a break below potentially triggering a move towards the next support levels at $0.6732, $0.6712, and $0.6697.
Conversely, the bulls have their eyes on the immediate resistance at $0.6767. A decisive move above this level could open the door for a rally towards the next resistance targets at $0.6787 and $0.6804.
The 50-day Exponential Moving Average (EMA), currently at $0.6742, is also acting as dynamic support, further reinforcing the bullish outlook.
The Relative Strength Index (RSI) is currently at 64, suggesting some room for further upside before entering overbought territory. However, traders should remain vigilant for any signs of exhaustion or reversal in momentum.
Given the current technical setup, traders could consider initiating long positions above $0.67518, with a stop-loss order placed below $0.67321. The initial target for profit-taking would be the resistance level at $0.67870.
AUD/USD - Trade Ideas
Entry Price – Buy Above 0.67518
Take Profit – 0.67870
Stop Loss – 0.67321
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$352/ -$197
Profit & Loss Per Mini Lot = +$35/ -$19