Audusd rises slightly amid consolidation as fed revises interest rate outlook

AUDUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	0.02%	1.3 Pips
Week to-date	0.62%	39 Pips
March	2.57%	159.5 Pips

Upcoming key events (London Time)

Thu 12:30 AM AUD Labour Force Monthly Employment Change

What happened lately

The United States Federal Reserve has adjusted its interest rate projections across various timelines. In the current assessment, the U.S. interest rate projection for the first year has dropped to 3.4%, compared to a prior forecast of 3.9%. Despite this decline, the longer-term interest rate projection remains consistent at 3%. Additionally, the Federal Reserve has opted to maintain its Federal Funds Rate at 4.5%, keeping it unchanged in comparison to the previous rate. For longer-term projections, the interest rate outlook has seen a slight decrease to 3.9% from an earlier estimation of 4.4%. Similarly, the U.S. interest rate projection for the second year has been revised downward to 3.1% from an earlier figure of 3.4%. These adjustments reflect a somewhat accommodative stance by the Federal Reserve on interest rates, indicating a potential easing in monetary policy to support economic growth.

The AUDUSD currency pair experienced a slight increase of 0.02% to 0.63600 on Wednesday, indicating a phase of consolidation as the market digests the latest economic data. The decline in U.S. interest rate projections suggests a dovish outlook from the Federal Reserve, which typically weighs on the U.S. dollar. As such, this dovish stance can potentially strengthen the Australian dollar relative to the U.S. dollar. However, traders will be closely monitoring upcoming high-impact events, such as the Australian Labour Force Monthly Employment Change. Positive employment data from Australia could further bolster the Australian dollar, potentially pushing the AUDUSD pair higher. Conversely, any negative surprise could offset the benefit of the lower U.S. rate outlook, maintaining the currency pair within its consolidation range. The overall impact on AUDUSD will thus hinge on forthcoming Australian economic indicators and their juxtaposition with the U.S. interest rate outlook.

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What can we expect from AUDUSD today?

AUDUSD on Wednesday rose 0.02% to 0.63600. 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 0.63574 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.63633 or trades above daily pivot 0.63603. Break above could target R1 at 0.6363. While to the downside, we are looking at 0.63574 (S1) and daily low of 0.63577 as support levels. AUDUSD need to break on either side to indicate a short-term bias. A break above 0.63633 may suggest continuation after recent positive movement.

For the week to-date, take note that AUDUSD is bullish as the pair continued to trade higher and is up by 0.62% over the past few days.

Key levels to watch out:

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