Audusd falls amid us producer price surge and weaker australian employment data

AUDUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	-0.57%	-36.8 Pips
Week to-date	-2.06%	-135.5 Pips
November	-1.94%	-127.7 Pips

Upcoming key events (London Time)

Fri 01:30 PM USD Monthly Retail Trade (1-mth)

What happened lately

In the United States, there is a notable increase in the Producer Price Index (PPI) to 0.2% in October from 0% in September, with a 12-month PPI rising to 2.4% from 1.9%. The PPI excluding food and energy also indicates growth, moving to 3.1% over 12 months compared to a revised prior figure of 2.9%. The monthly non-food and energy PPI rose by 0.3% in October, up from 0.2% in September. Additionally, the Department of Labor reports a decline in initial unemployment insurance claims from 221K to 217K. The Consumer Price Index (CPI) also showed an increase to 2.6% over the year up to October, compared to 2.4% in September, with steady monthly inflation rates indicating sustained levels. The Bureau of Labor Statistics provides this information.

Conversely, Australia’s employment figures have weakened. The Australian Bureau of Statistics reports that full-time employment has decreased in October, falling to 9.7K from 48.8K previously. Part-time employment also declined to 6.2K from 12.5K. The unemployment rate holds steady at 4.1% in October, yet the participation rate marginally declines from 67.2% to 67.1%. Overall employment change dropped significantly to 15.9K from a previously revised 61.3K. The decrease in the consumer inflationary expectations from 4% to 3.8% signals easing inflation pressure. Meanwhile, the Wage Price Index remained constant at 0.8% compared to the previous quarter, indicating no remarkable wage growth.

The divergence in economic data between the U.S. and Australia suggests potential impacts on the AUDUSD exchange rate. Stronger U.S. inflation data alongside decreasing unemployment claims traditionally support a strong U.S. dollar, while weaker employment data and static wage growth in Australia provide less support for the Australian dollar. Consequently, the AUDUSD exchange rate has decreased, reflecting a weakening Australian currency against the U.S. dollar. Anticipation of upcoming high-impact U.S. economic indicators, such as the Monthly Retail Trade figures, further contributes to market uncertainty, potentially applying additional pressure on the AUDUSD pair.

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What can we expect from AUDUSD today?

AUDUSD on Thursday dropped -0.57% to 0.64491. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for AUDUSD looks bearish as the pair posted lower in Thursday trading session.

Looking ahead for the day, immediate support level is at S1 0.64276 with break below could see further selling pressure towards S2 at 0.6406. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.64957 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.64401 would indicate selling pressure.

For the week to-date, take note that AUDUSD is bearish as the pair posted lower by -2.06%.

Key levels to watch out:

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