Audusd declines amid mixed US economic data and housing market concerns

AUDUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	-0.35%	-22.1 Pips
Week to-date	-0.66%	-41.7 Pips
January	0.5%	31.2 Pips

Upcoming key events (London Time)

Wed 12:30 AM AUD CPI Inflation Rate (3-mth)
Wed 12:30 AM AUD Monthly CPI Indicator (12-mth)
Wed 07:00 PM USD Fed Interest Rate Decision (Federal Funds Rate)
Thu 01:30 PM USD GDP annual rate

What happened lately

In the United States, recent data released by the Federal Housing Finance Agency (FHFA) and the Census Bureau revealed a mixed economic outlook. The U.S. House Price Index for November showed a decrease to 0.3%, down from 0.5% in October, indicating a slowdown in the housing market. However, U.S. new-home sales saw a 3.6% increase in December, although this was a decrease from the growth rate of 5.9% in November. These figures suggest a continuation of a cooling housing market, which could have broader implications for consumer spending and economic growth. Additionally, there was a significant decline in U.S. durable goods new orders, which fell 2.2% in December compared to a revised -1.2% figure in November. Despite this, orders excluding transportation increased by 0.3%, showing a slight improvement from November’s revised figures. The mixed performance in durable goods orders suggests uncertainty in business investment and manufacturing, an important sector for economic health.

For the AUDUSD currency pair, this recent economic data from the U.S. presents a nuanced picture. The decline in U.S. house prices and durable goods orders underscores potential vulnerabilities in the U.S. economy, which may weaken the U.S. dollar if investors become concerned about future growth prospects. This could provide some support for the Australian dollar if investors seek higher yields or diversification from the U.S. dollar. However, the upcoming releases of Australia’s CPI Inflation Rate and Monthly CPI Indicator will greatly influence the AUDUSD movement, as inflation data are key indicators for making interest rate decisions, which affect currency valuations. Given that the AUDUSD pair has dropped by 0.35% to 0.62520, these upcoming high-impact economic events for both Australia and the U.S. could result in increased volatility for the currency pair. Therefore, market participants will be closely monitoring these events and any dovish or hawkish commentary in the Federal Reserve’s interest rate decision could shift the pair significantly as well.

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What can we expect from AUDUSD today?

AUDUSD on Tuesday dropped -0.35% to 0.62520. Price is below 9-Day EMA while Stochastic is falling.

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 0.62342 with break below could see further selling pressure towards S2 at 0.62164. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.62740 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.62363 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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