Economic indicators and mixed signals keep AUDUSD pair in consolidation mode

AUDUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.03%	1.7 Pips
Week to-date	0.54%	34 Pips
March	2.49%	154.5 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In the United States, initial unemployment insurance claims rose slightly to 223,000 in the week ending 15 March, compared to the previous figure of 221,000, which had been revised from 220,000, indicating a slight uptick in layoffs. The U.S. Manufacturing Business Outlook Survey, conducted by the Philadelphia Fed, saw a drop in March to 12.5 points from 18.1 points in February, suggesting a decline in manufacturing sector momentum. While the Federal Reserve’s interest rate decision kept the federal funds rate unchanged at 4.5%, interest rate projections for the first and second years decreased to 3.4% and 3.1% respectively, marking a dovish tone compared to the previous projections. The long-term projection remained steady at 3%. These economic indicators reflect mixed signals regarding U.S. economic strength and potential future monetary policy easing by the Federal Reserve.

In Australia, part-time employment saw an increase of 17,000 in February from a revised figure of -6.5K, previously reported at -10.1K. However, full-time employment decreased by 35.7K following a previous increase of 54.1K in January, leading to an overall decrease in employment change to -52.8K in February from 44K in January. Despite these fluctuations in employment numbers, the unemployment rate remained stable at 4.1% in February, unchanged from January. Additionally, the participation rate fell to 66.8% from 67.3% in January, indicating a reduced labor force involvement. These figures reflect a weakening labor market scenario, posing challenges for Australia’s economic outlook.

The economic news from both the U.S. and Australia presents a complex picture for the AUDUSD. While the U.S. data suggests a softer approach to interest rate hikes in the future, which could lead to a weakening of the U.S. dollar, the declining economic indicators in Australia may exert a downward pressure on the Australian dollar. The mixed signals may result in the AUDUSD pair remaining in consolidation as market participants weigh the relative strength of the two economies. Consequently, the slight rise in AUDUSD by 0.03% to 0.63580 on Thursday reflects this uncertainty, with traders likely remaining cautious, awaiting clearer economic trends or upcoming major events to provide more definite directional cues for the currency pair.

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What can we expect from AUDUSD today?

AUDUSD on Thursday rose 0.03% to 0.63580. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for AUDUSD looks mixed as the pair is likely to consolidate above 0.63541 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.63640 or trades above daily pivot 0.63591. Break above could target R1 at 0.63629. While to the downside, we are looking at 0.63541 (S1) and daily low of 0.63552 as support levels. AUDUSD need to break on either side to indicate a short-term bias. A break above 0.63640 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 0.54% over the past few days.

Key levels to watch out:

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