Audusd drops as US economy shows strength and Australia faces mixed signals

AUDUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-0.66%	-42.8 Pips
Week to-date	-1.71%	-112.1 Pips
December	-1.22%	-79.4 Pips

Upcoming key events (London Time)

Fri 01:30 PM USD Nonfarm Payroll Employment

What happened lately

In the United States, economic indicators reflect a positive shift in the manufacturing sector and labor market. The Census Bureau reported a 0.2% increase in new orders for manufactured goods in October, marking an improvement from the previous month’s revised decline of 0.2%. Additionally, the Bureau of Labor Statistics noted a rise in job openings, with the Job Openings and Labor Turnover Survey (JOLTS) showing an increase to 7.744 million in October from a revised 7.372 million in September. These figures suggest a strengthening in both manufacturing activity and employment opportunities, hinting at improving economic conditions.

In Australia, various economic data presents a mixed picture. According to the Australian Bureau of Statistics, the quarterly GDP growth for Q3 increased to 0.3%, slightly higher than the 0.2% growth in Q2. However, the annual GDP rate for the same quarter fell to 0.8%, down from 1% previously, indicating a slowdown in yearly growth. Despite this, the AiG Industry Index saw a significant improvement, rising to -10.8 points in November from -28.8 points in October. This suggests a recovery within Australia’s industrial sectors, potentially offsetting some concerns about slower overall annual growth.

The current AUDUSD level reflects this nuanced economic backdrop. The Australian dollar dropped by 0.66% to 0.64278 against the US dollar, likely driven by contrasting economic momentum in both countries. The US economy appears to be gaining strength with rising job openings and increased manufacturing orders, making the dollar more attractive. Meanwhile, Australia’s mixed GDP signals and persistent economic challenges might be contributing to a weaker Aussie dollar. Looking forward, traders may also be cautious about the upcoming US Nonfarm Payroll Employment report, scheduled for Friday, which could further influence the USD’s strength depending on its outcome.

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What can we expect from AUDUSD today?

AUDUSD on Wednesday dropped -0.66% to 0.64278. Price is below 9-Day EMA while Stochastic is falling.

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

Looking ahead for the day, immediate support level is at S1 0.63883 with break below could see further selling pressure towards S2 at 0.63489. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.64882 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.63988 would indicate selling pressure.

For the week to-date, take note that AUDUSD is bearish as the pair posted lower by -1.71%.

Key levels to watch out:

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