Audusd drops 0.65% as US economic indicators strengthen and RBA decision looms

AUDUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	-0.65%	-40.7 Pips
Week to-date	-0.64%	-40.4 Pips
March	0.18%	11.4 Pips

Upcoming key events (London Time)

Tue 01:30 AM AUD Retail Trade Turnover (seasonally adjusted) (1-mth)
Tue 04:30 AM AUD RBA Monetary Policy Decision (Cash Rate Target)

What happened lately

The latest data shows an improvement in the U.S. Chicago Purchasing Managers’ Index, which rose to 47.6 points in March from 45.5 points in February. This indicates an uptick in business activity and manufacturing in the Chicago region, a positive sign for the U.S. economy. Such an increase might signal a rise in economic confidence and growth prospects within the manufacturing sector, potentially boosting investor sentiment towards U.S. markets.

In Australia, significant economic events are scheduled that could influence market movements. The Retail Trade Turnover report, a key economic indicator of consumer spending, will be released. Positive results from this report could indicate a healthier economic demand and consumer confidence in Australia. Moreover, the Reserve Bank of Australia (RBA) is set to announce its Monetary Policy Decision regarding the Cash Rate Target, a critical factor affecting the Australian dollar. Any deviation from expected monetary policy could impact the AUD, depending on whether the RBA takes a hawkish or dovish stance.

For the AUDUSD currency pair, the recent strengthening of the U.S. Chicago PMI suggests a supportive environment for the U.S. dollar, which may weigh on the AUDUSD pair, considering the dollar’s potential appreciation. However, the upcoming Australian economic releases, especially the RBA’s decision, will play a crucial role in determining the trajectory of AUDUSD. If the RBA maintains a neutral or expansionary policy while Australian economic data continues to show resilience, the AUD might find some support against the USD. Conversely, any indication of tightening by the RBA coupled with strong U.S. economic indicators could see further downside pressure on AUDUSD. Overall, the interplay between these economic releases will likely dictate short-term movements of the currency pair.

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What can we expect from AUDUSD today?

AUDUSD on Monday dropped -0.65% to 0.62418. Price is below 9-Day EMA while Stochastic is falling.

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

Looking ahead for the day, immediate support level is at S1 0.62066 with break below could see further selling pressure towards S2 at 0.61713. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.63005 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.62183 would indicate selling pressure.

For the week to-date, take note that AUDUSD is bearish as the pair posted lower by -0.64%.

AUDUSD ended month of March trading session up by 0.18% or 11.4 pips higher.

Key levels to watch out:

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