Audusd rises amid anticipation of us economic events and inflation data

AUDUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	0.36%	22.4 Pips
Week to-date	0.33%	20.9 Pips
February	1.03%	64.3 Pips

Upcoming key events (London Time)

Tue 03:00 PM USD Federal Reserve Chair Jerome Powell testifies
Wed 01:30 PM USD CPI Inflation Rate (12-mth)
Wed 01:30 PM USD CPI Inflation Rate excluding Food and Energy sectors (12-mth)

What happened lately

The recent economic landscape portrays a notable absence of major news across various sectors. However, the spotlight is drawn to the United States with impending high-impact events that could potentially reshape economic perceptions and forecasts. The financial community keenly anticipates the testimony of Federal Reserve Chair Jerome Powell set for Tuesday, an event that typically attracts significant attention due to insights into the Fed’s monetary policy stance and economic outlook. Additionally, on Wednesday, the release of the Consumer Price Index (CPI) Inflation Rate for a 12-month period, alongside the CPI excluding food and energy sectors, will provide crucial indicators regarding inflation trends in the United States. These upcoming data points will offer critical evaluations of inflationary pressures potentially influencing the Federal Reserve’s interest rate decisions going forward.

Amidst this backdrop, the Australian Dollar (AUD) exhibits resilience against the US Dollar (USD), reflected in the AUDUSD currency pair’s modest ascent by 0.36%, bringing it to 0.62791 on Monday. This uptick suggests a cautious but steady confidence in the Australian currency, despite no significant domestic economic revelations to support the upward movement. The advance might partly be attributed to market positioning ahead of the US economic data releases, as investors possibly seek to hedge against or capitalize on anticipated volatility surrounding the USD.

The pending US economic events, particularly the inflation data, are poised to have substantial ramifications for the AUDUSD pair. Should the US CPI figures manifest higher than expected inflation, it might bolster the USD under speculation of more aggressive Federal Reserve rate hikes, potentially exerting downward pressure on the AUDUSD pair. Conversely, if inflation data fall below expectations, it may weaken the USD as rate hike anticipations temper, possibly providing an uplift to the Australian Dollar relative to its American counterpart. Currency traders and analysts are likely to exhibit an elevated sensitivity to these developments, which in turn could translate into increased volatility for the AUDUSD pair as they adjust their positions in response to unfolding economic narratives.

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What can we expect from AUDUSD today?

AUDUSD on Monday rose 0.36% to 0.62791. Price is above 9-Day EMA while Stochastic is falling in overbought zone.

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

Looking ahead for the day, immediate upside resistance level is R1 at 0.62937 with break above could target R2 at 0.63082 or figure level area. While towards the downside, we are looking at daily low of 0.62518 as an important support. Break below this level could weaken the current bullish momentum. A break above 0.62873 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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