Audusd sees modest rise, driven by U.S. manufacturing boost and Australian monetary easing

AUDUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.15%	9.8 Pips
Week to-date	0%	0.2 Pips
February	2.28%	141.7 Pips

Upcoming key events (London Time)

Wed 07:00 PM USD FOMC Meeting Minutes
Thu 12:30 AM AUD Labour Force Monthly Employment Change

What happened lately

The United States has seen a notable improvement in its manufacturing sector, with the New York Empire State Manufacturing Index rising to 5.7 points in February from -12.6 in January. This turnaround indicates a positive shift in manufacturing activity, suggesting resilience and potential growth in the sector. Such an increase is often seen as a sign that businesses are more optimistic about economic conditions, which might support stronger production in the coming months. This positivity can be attributed to several factors, such as better demand for goods, easing of supply chain disruptions, or enhanced business confidence.

In Australia, the Reserve Bank of Australia’s latest Monetary Policy Decision resulted in a reduction of the Cash Rate Target to 4.1% from the previous 4.35%. This decrease implies that the central bank is adopting a more accommodative policy stance to stimulate economic activity amidst economic uncertainties or to counteract slower growth. A lower cash rate typically aims to encourage borrowing and investment while reducing saving incentives, thereby supporting aggregate demand within the economy. The decision might also be influenced by inflation targets or labor market conditions that the Bank finds necessary to address.

The AUDUSD currency pair has recently seen a modest increase of 0.15%, reaching 0.63555. This movement suggests a period of consolidation for the pair. However, upcoming economic events could influence future trends. For the USD, the release of the FOMC Meeting Minutes might reveal insights into the Federal Reserve’s outlook on interest rates and monetary policy, potentially strengthening or weakening the dollar based on the perceived hawkishness or dovishness. Conversely, Australia’s Labour Force Monthly Employment Change can significantly impact the AUD, as it reflects the health of the labor market. Improved employment figures may support a stronger AUD, while disappointing data could exert downward pressure. Traders and investors may adjust their positions in anticipation of these high-impact events, affecting volatility and direction in the AUDUSD pair.

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What can we expect from AUDUSD today?

AUDUSD on Tuesday rose 0.15% to 0.63555. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for AUDUSD looks mixed as the pair is likely to consolidate above 0.63037 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.64000 or trades above daily pivot 0.63518. Break above could target R1 at 0.64037. While to the downside, we are looking at 0.63037 (S1) and daily low of 0.63000 as support levels. AUDUSD need to break on either side to indicate a short-term bias. A break above 0.64000 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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