Audusd falls as US housing data drops and inflation remains stable in Australia

AUDUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-0.59%	-37.4 Pips
Week to-date	-0.71%	-45.4 Pips
February	1.62%	100.4 Pips

Upcoming key events (London Time)

Thu 01:30 PM USD GDP annual rate
Fri 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)

What happened lately

The recent economic data from the United States reflects a decline in housing market activity, with January’s New-Home Sales Change plummeting to -10.5% from the previous revised figure of 8.1%. This substantial drop indicates a cooling demand in the housing sector, which can be attributed to rising interest rates and affordability challenges. Additionally, the U.S. House Price Index for December remained flat at 0.4%, signaling potential stabilization in housing prices amidst the broader economic environment. These figures suggest that the U.S. housing market might be experiencing headwinds, which could impact broader economic growth. Market participants are now looking forward to the upcoming GDP and PCE Price Index data to gauge overall economic health and inflationary pressures.

In Australia, the inflationary pressure appears muted as evidenced by the Monthly CPI Indicator which remained constant at 2.5% for January, the same as December. This stability in consumer prices suggests controlled inflation within the Australian economy. With the inflation rate steady, the Reserve Bank of Australia is likely under less pressure to make aggressive adjustments to monetary policy. The stable CPI allows for a more measured approach to interest rate decisions moving forward, supporting an economic environment conducive to steady growth without sharp inflationary spikes.

The AUDUSD currency pair witnessed a decline of -0.59% to 0.63047, reflecting recent developments in economic data and market sentiment. The stronger U.S. dollar pressures the Australian dollar, especially when juxtaposed with Australia’s stable but unimproved CPI. The forthcoming high-impact events, including the U.S. GDP annual rate and PCE Price Index, are critical indicators likely to sway investor sentiment and currency movements. Positive data from the U.S. could further strengthen the dollar, putting additional pressure on AUDUSD. Conversely, should the data reveal economic weakness or lower-than-expected inflation, the market might see some relief in the downward pressure on the Australian dollar. Thus, traders and investors will be keenly watching these events for cues on economic trajectories and currency valuations.

Latest from X (Twitter)

Tweets by Australian Bureau of Statistics

What can we expect from AUDUSD today?

AUDUSD on Wednesday dropped -0.59% to 0.63047. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for AUDUSD looks bearish as the pair posted lower in Wednesday trading session.

Looking ahead for the day, immediate support level is at S1 0.62821 with break below could see further selling pressure towards S2 at 0.62596. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.63536 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.62953 would indicate selling pressure.

For the week to-date, take note that AUDUSD is bearish as the pair posted lower by -0.71%.

Key levels to watch out:

#AUDUSD Trending on Twitter

[custom-twitter-feeds hashtag=”#AUDUSD” num=3 showheader=false]