Audusd rises 0.7% as Australia’s mixed economic data competes with U.S. slowdown

AUDUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.7%	43.7 Pips
Week to-date	-0.68%	-42.5 Pips
February	0.58%	35.9 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In Australia, economic indicators present a mixed picture. The AiG Industry Index experienced a further decline in December, dropping to -17.4 points from -10.8 points in November, indicating a contraction in industrial activity. Contrarily, Australia’s Retail Trade rose in the third quarter, reaching a 1% increase, up from 0.5% in the previous quarter. However, this positive trend was not sustained as December’s seasonally adjusted retail trade turnover fell by 0.1%, down from November’s 0.8% growth. On a positive note, building approvals in December rebounded, increasing by 0.7%, a significant improvement from the 3.6% decline observed in November.

The U.S. economy witnessed a slowdown in employment and manufacturing sectors. According to the JOLTS report, job openings diminished significantly in December, dropping to 7.6 million from a previously adjusted 8.098 million in November, signifying reduced demand for labor. Furthermore, new orders for manufactured goods declined by 0.9% after a revised decrease of 0.8% in November, reflecting continued weakness in manufacturing demand. These figures imply a cooling in economic activity, potentially signaling constrained growth in the near term.

The recent economic data from both Australia and the U.S. have significant implications for the AUDUSD currency pair. Australia’s weakening industrial index and retail trade figures pose challenges for the AUD, although improvements in building approvals may offer some support. Meanwhile, the U.S. economic deceleration, evident from declining job openings and manufacturing orders, reduces support for the USD. On Tuesday, the combination of these factors resulted in the AUDUSD rising by 0.7% to 0.62504. This movement suggests that the market may be anticipating a relatively stronger economic outlook for Australia compared to the U.S., at least in the short term. However, without significant upcoming events, any changes in broader investor sentiment or risk appetite could further influence this currency pair.

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What can we expect from AUDUSD today?

AUDUSD on Tuesday rose 0.7% to 0.62504. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for AUDUSD looks bullish as the pair ended higher after Tuesday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 0.6285 with break above could target R2 at 0.63195 or figure level area. While towards the downside, we are looking at daily low of 0.61701 as an important support. Break below this level could weaken the current bullish momentum. A break above 0.62621 may suggest continuation after recent positive movement.

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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