Audusd drops amid mixed economic data from the us and australia

AUDUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	-0.29%	-18.7 Pips
Week to-date	-0.16%	-10 Pips
May	-0.26%	-16.9 Pips

Upcoming key events (London Time)

Fri 02:30 AM AUD Retail Trade Turnover (seasonally adjusted) (1-mth)
Fri 01:30 PM USD Nonfarm Payroll Employment

What happened lately

In the United States, economic data for the end of April presented a mixed outlook. The Initial Unemployment Insurance Claims rose slightly to 241,000 from 223,000. Concurrently, inflationary pressures eased as the U.S. PCE Price Index, excluding food and energy, showed a 12-month decrease to 2.6% in March from 2.8% in February. Personal incomes rose by only 0.5%, less robust than February’s revised 0.7% growth, yet consumer spending increased by 0.7% in March, suggesting continued consumer confidence. There was a notable surge in Pending Home Sales with a 6.1% increase in March compared to February’s 2.1%. Price index figures showed no change on a monthly basis, confirming a reduction in inflation pressures. However, the GDP annual rate reported a downturn to -0.3% for Q1 from the previous 2.4% in Q4, while the PCE excluding food and energy over Q1 increased to 3.5%, indicative of underlying inflationary pressure. Meanwhile, the Chicago PMI dropped to 44.6 in April from 47.6, signaling potential slowing in manufacturing activities.

In Australia, the RBA Trimmed Mean CPI for Q1 increased to 0.7% compared to 0.5% in the previous quarter, indicating rising core inflation. The CPI inflation rate grew significantly, jumping to 0.9% for Q1 from 0.2% in Q4, although the 12-month inflation rate remained steady at 2.4%. The monthly CPI indicator also held steady at 2.4% in March, the same as February. However, there was a slight decrease in the 12-month Trimmed Mean CPI to 2.9% from Q4’s 3.2%.

The current economic conditions suggest a complex outlook for the AUDUSD currency pair. Given the data, the U.S. appears to be experiencing mixed signals, with rising consumer spending but a declining GDP and Chicago PMI. This may increase downward pressure on the USD amid potential Fed considerations regarding inflation trends. Meanwhile, Australia’s data suggests accelerating inflationary pressures which could lead to expectations of future rate hikes by the Reserve Bank of Australia, potentially supporting the AUD. However, the AUDUSD pair fell by 0.29% to 0.63812, reflecting market volatility possibly due to the consolidation phase ahead of significant economic events, including the upcoming AUD Retail Trade Turnover and U.S. Nonfarm Payroll data, both crucial indicators that could influence future currency movements.

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What can we expect from AUDUSD today?

AUDUSD on Thursday dropped -0.29% to 0.63812. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for AUDUSD looks mixed as the pair is likely to consolidate above 0.63551 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.64272 or trades above daily pivot 0.63911. Break above could target R1 at 0.64173. While to the downside, we are looking at 0.63551 (S1) and daily low of 0.63650 as support levels. AUDUSD need to break on either side to indicate a short-term bias. A close below 0.63650 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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