Audusd drops amid mixed economic signals from US and Australia

AUDUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	-0.41%	-25.8 Pips
Week to-date	0.14%	8.4 Pips
January	0.14%	8.9 Pips

Upcoming key events (London Time)

Wed 12:30 AM AUD Monthly CPI Indicator (12-mth)
Wed 07:00 PM USD FOMC Meeting Minutes

What happened lately

In the United States, the November Job Openings and Labor Turnover Survey (JOLTS) indicated a rise in job openings, reaching 8.098 million, compared to the revised October figure of 7.744 million. The initial October figure was 7.839 million. This increase in job openings suggests continued strength in the U.S. labor market, which can be interpreted as a positive sign for the economy. However, the data also revealed a decrease in new orders for manufactured goods by 0.4% for November, following a revised increase in October from 0.2% to 0.5%, as reported by the Census Bureau. This decline might signify a slowdown in manufacturing demand and contribute to concerns about future economic growth. These contrasting data from the labor and manufacturing sectors reflect the mixed nature of the U.S. economic landscape, indicating areas of strength and potential weakness.

Meanwhile, in Australia, the latest data from the Australian Bureau of Statistics showed that November’s Building Approvals fell by 3.6%, a significant downturn from the 4.2% increase recorded in October. This decline highlights challenges in the construction sector, which could impact economic growth since building activity is a crucial component of the Australian economy. The reduction in building approvals could reflect a cautious stance among developers amid rising interest rates and economic uncertainty, further contributing to potential headwinds for the Australian economy.

The AUDUSD currency pair experienced a drop of 0.41% to 0.62285, with the economic data bearing implications for its future trajectory. The strength in the U.S. job market, contrasted with weaknesses in the manufacturing sector, creates a mixed outlook for the U.S. dollar. However, the overall positive labor data could support the dollar, out-shadowing the weaker manufacturing numbers. On the Australian side, the disappointing building approvals report adds pressure on the Australian dollar, as concerns about the construction sector’s health could lead to bearish sentiment. Market participants will be closely watching the upcoming Australian monthly CPI indicator and the U.S. FOMC meeting minutes, as these events are likely to influence AUDUSD dynamics further, providing clarity on economic directions and monetary policy path. The Australian dollar may face additional pressure if inflation data indicates persistent price pressures, while the FOMC minutes could reinforce U.S. dollar strength if they suggest a hawkish Fed stance.

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What can we expect from AUDUSD today?

AUDUSD on Tuesday dropped -0.41% to 0.62285. Price is below 9-Day EMA while Stochastic is rising.

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

Looking ahead for the day, immediate support level is at S1 0.62069 with break below could see further selling pressure towards S2 at 0.61853. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.62881 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.62259 would indicate selling pressure.

For the week to-date, take note that AUDUSD is mixed as compared to the prior week.

Key levels to watch out:

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