Audusd drops amid economic uncertainty in US and Australia

AUDUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	-0.68%	-43.8 Pips
Week to-date	-0.13%	-8 Pips
April	2.24%	139.9 Pips

Upcoming key events (London Time)

Wed 02:30 AM AUD CPI Inflation Rate (3-mth)
Wed 02:30 AM AUD Monthly CPI Indicator (12-mth)
Wed 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)
Wed 01:30 PM USD GDP annual rate
Thu 02:30 AM AUD International Trade in Goods (1-mth)

What happened lately

In the United States, the latest Job Openings and Labor Turnover Survey (JOLTS) revealed a significant decrease in job openings for March. The figure dropped to 7.192 million from a revised 7.568 million in February, as reported by the Bureau of Labor Statistics. This decline indicates a potential cooling in the labor market as fewer positions are available for job seekers. Simultaneously, the U.S. House Price Index showed a minimal decrease, with February’s 1-month index dipping to 0.1%, down from a revised 0.2% in January and a previous figure of 0.3%. Such data may imply a slowing housing market, possibly due to tighter monetary conditions affecting affordability and buyer sentiment.

Turning to Australia, upcoming economic events such as the Consumer Price Index (CPI) inflation rate and international trade data, slated for release, are highly anticipated. These will provide key insights into the country’s economic health and inflationary pressures. Australia’s CPI rate, particularly over a 3-month period, will be crucial in understanding underlying inflation trends and guiding potential changes in monetary policy.

The drop in AUDUSD to 0.63842, a decrease of -0.68% amid market consolidation on Tuesday, reflects a combination of these economic signals. The recent U.S. data suggests a softening in economic conditions, which typically would lead to a weakening USD. However, this is counterbalanced by the Australian dollar’s sensitivity to upcoming domestic inflation data. If Australia’s CPI indicates stronger than expected inflationary pressures, the Australian dollar might rally, potentially strengthening against the USD. Conversely, subdued inflationary data could pressure the AUD further, potentially leading to more consolidation or decline in the AUDUSD pair. Traders and investors will closely monitor the forthcoming economic announcements, as they could significantly influence market direction.

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What can we expect from AUDUSD today?

AUDUSD on Tuesday dropped -0.68% to 0.63842. 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 0.63566 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.64496 or trades above daily pivot 0.64031. Break above could target R1 at 0.64307. While to the downside, we are looking at 0.63566 (S1) and daily low of 0.63755 as support levels. AUDUSD need to break on either side to indicate a short-term bias. A close below 0.63755 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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