Audusd drops slightly amid inflation rise in Australia and mixed US data

AUDUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	-0.03%	-2.1 Pips
Week to-date	0.03%	1.9 Pips
April	0.67%	41.7 Pips

Upcoming key events (London Time)

Wed 08:00 PM USD US Liberation Day Tariff Announcements
Thu 02:30 AM AUD International Trade in Goods (1-mth)

What happened lately

Australia has seen a rise in inflation, with the TD Securities Inflation rate escalating from 2.2% in February to 2.8% in March. This inflation uptick may reflect increasing price pressures within the economy. Meanwhile, the performance of the Australian Industry Group (AiG) Index has deteriorated, decreasing from -17.6 points in January to -22.2 points in February, indicating a potential contraction in the industrial sector. The Reserve Bank of Australia (RBA) maintained its monetary policy stance by keeping the cash rate target at 4.1%, showing a cautious approach amidst prevailing economic conditions. Furthermore, retail trade turnover slightly decreased, showing a decline from 0.3% in January to 0.2% in February, suggesting a potential weakening in consumer spending.

In the United States, the economic data presents a mixed outlook. The Job Openings and Labor Turnover Survey (JOLTS) showed a reduction in job openings from 7.74 million in January to 7.568 million in February, highlighting a tightening in the labor market. Conversely, the Chicago Purchasing Managers’ Index improved from 45.5 points in February to 47.6 points in March, suggesting an increase in manufacturing activity and a potential economic upturn.

The AUD/USD exchange rate, which dropped slightly by 0.03% to 0.62430, remains in a consolidation phase. The increase in Australia’s inflation might put upward pressure on the Australian dollar as markets anticipate possible future tightening by the RBA should inflation persistently rise. However, the contraction in the industry’s activity and muted retail sales growth could weaken the AUD, as these factors may impede economic growth prospects. On the other hand, the mixed U.S. economic data with declining job openings but rising manufacturing activity provides an uncertain backdrop for the USD’s performance. The upcoming AUD International Trade in Goods report and USD Liberation Day Tariff Announcements will be pivotal in determining the near-term direction for AUD/USD. Expectations from these events could lead to volatility, impacting the currency pair based on how markets interpret the implications on economic growth and trade policies.

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What can we expect from AUDUSD today?

AUDUSD on Tuesday dropped -0.03% to 0.62430. Price is below 9-Day EMA while Stochastic is rising.

Updated daily direction for AUDUSD looks mixed as the pair is likely to consolidate above 0.62379 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.62472 or trades above daily pivot 0.62426. Break above could target R1 at 0.62476. While to the downside, we are looking at 0.62379 (S1) and daily low of 0.62375 as support levels. AUDUSD need to break on either side to indicate a short-term bias. A close below 0.62375 would indicate selling pressure.

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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