Audusd drops as mixed economic data from us and australia influences market sentiment

AUDUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	-0.54%	-33.4 Pips
Week to-date	-1.36%	-85.8 Pips
January	-0.18%	-11 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

The United States has reported a decline in several key economic metrics for December and the fourth quarter. U.S. Pending Home Sales saw a steep decrease of -5.5% in December, falling from November’s revised figure of 1.6%. In the labor market, the number of Initial Unemployment Insurance Claims for the week ending January 25th decreased to 207,000 from 223,000 previously. The GDP statistical outlook reveals that the annual growth rate in the Q4 flash estimate dipped to 2.3%, down from 3.1% in Q3, while the Personal Consumption Expenditures (PCE) excluding food and energy rose to 2.5% from 2.2% in the third quarter. Furthermore, the overall PCE Price Index showed an increment from 1.5% in Q3 to 2.3% in the fourth-quarter estimates, alongside the GDP Price Index increasing to 2.2% from 1.9%. Meanwhile, the Federal Funds Rate remained stable at 4.5%.

In Australia, inflation-related indicators for the fourth quarter exhibited minor fluctuations. The Q4 Consumer Price Index (CPI) Inflation Rate maintained stability at 0.2%, consistent with the previous quarter’s figure. However, the RBA Trimmed Mean CPI dipped to 0.5% from 0.8% in Q3. On an annual basis, CPI inflation decreased to 2.4% from 2.8% in Q3, and the RBA Trimmed Mean CPI also dropped to 3.2% from 3.5%. Despite the downward trends, the Monthly CPI Indicator showed a slight increase to 2.5% in December, from November’s 2.3%.

The movements in the economic metrics from the U.S. and Australia have impacted the AUDUSD currency pair. With the U.S. reporting weaker GDP and home sales numbers, alongside stable interest rates, there is an indication of a mixed economic outlook. Conversely, Australia’s moderate inflation readings suggest a less aggressive stance towards monetary policy. As a result, the Australian dollar may face downward pressures against the U.S. dollar due to relatively weaker economic data, causing the AUDUSD pair to slide by 0.54% to 0.62071 on Thursday. The absence of major upcoming events suggests that market sentiment may continue to pressure the Aussie dollar unless new data emerges to influence investor outlook.

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What can we expect from AUDUSD today?

AUDUSD on Thursday dropped -0.54% to 0.62071. 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 0.61892 with break below could see further selling pressure towards S2 at 0.61713. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.62434 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.61984 would indicate selling pressure.

For the week to-date, take note that AUDUSD is bearish as the pair posted lower by -1.36%.

Key levels to watch out:

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