Audusd experiences slight drop amid consolidation phase ahead of upcoming economic releases

AUDUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	-0.12%	-7.6 Pips
Week to-date	-0.18%	-12 Pips
May	1.28%	82.1 Pips

Upcoming key events (London Time)

Wed 02:30 AM AUD Monthly CPI Indicator (12-mth)
Wed 07:00 PM USD FOMC Meeting Minutes

What happened lately

The economic data does not present any significant updates for today, with the AUDUSD pair slightly declining by 0.12% to a level of 0.64864, indicating a phase of consolidation. This minor movement reflects the typical market behavior in the absence of critical economic announcements, suggesting traders might be in a wait-and-see mode pending more significant updates.

Looking ahead, two high-impact events are scheduled that could bring more volatility to the currency pair. The Australian Monthly CPI Indicator is set to release on Wednesday at 02:30 AM. This data will provide insights into the inflation trends in Australia, potentially influencing market expectations regarding future monetary policy directions by the Reserve Bank of Australia. A higher-than-expected CPI could strengthen the Australian dollar as it might signal a likelihood of interest rate hikes.

Similarly, the USD FOMC Meeting Minutes are expected on Wednesday at 07:00 PM. This is a critical event for the USD, as the minutes will shed light on the Federal Reserve’s latest discussions about interest rate paths and monetary policies. Markets will be keenly observing for any hints of either further tightening measures or a dovish pivot.

The AUDUSD pair’s current neutrality is likely due to traders positioning ahead of these upcoming releases. A significant deviation in the Australian CPI from market expectations could lead to an appreciation or depreciation of the AUD. On the other side, any surprising revelations from the FOMC minutes, especially regarding rate hikes, could strengthen or weaken the USD, thereby affecting the AUDUSD pair. The interplay of these factors will be significant in deciding the AUDUSD direction post these announcements.

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What can we expect from AUDUSD today?

AUDUSD on Monday dropped -0.12% to 0.64864. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for AUDUSD looks mixed as the pair is likely to consolidate above 0.64665 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.65373 or trades above daily pivot 0.65019. Break above could target R1 at 0.65218. While to the downside, we are looking at 0.64665 (S1) and daily low of 0.64820 as support levels. AUDUSD need to break on either side to indicate a short-term bias. A close below 0.64820 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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