Audusd drops as Australian economy shows signs of recovery and mixed US data emerges

AUDUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	-0.39%	-25.1 Pips
Week to-date	0.48%	31 Pips
June	0.48%	31 Pips

Upcoming key events (London Time)

Wed 02:30 AM AUD GDP (3-mth)
Thu 02:30 AM AUD International Trade in Goods (1-mth)

What happened lately

In Australia, the AiG Industry Index showed an improvement in its performance by increasing to -12.3 points in April 2025 from -15 points in March. This upward movement indicates a moderate reduction in the contraction rate of industry activity, suggesting signs of recovery. Additionally, Australia’s TD Securities Inflation (12-month) rate decreased significantly to 2.6% in May 2025 from 3.3% in the previous month. The substantial decline in inflation could provide more room for monetary policy flexibility, potentially aiding in further economic recovery efforts by stimulating consumer spending and boosting the overall economic activity.

In the United States, the new orders for manufactured goods saw a downturn, decreasing by 3.7% in April 2025, worsening from a decline of 3.4% in March. This decline in manufacturing orders reflects a slowdown in manufacturing activity, which could lead to reduced economic growth. Conversely, the U.S. Job Openings and Labor Turnover Survey (JOLTS) reported an increase in job openings to 7.391 million in April 2025, up from the revised figure of 7.2 million the previous month. This increase indicates a strong labor market with heightened demand for workers, which may exert upward pressure on wages and potentially influence retail and service sector growth.

The mixed economic data from Australia and the U.S. could exert varying influences on the AUDUSD currency pair. The improvement in Australia’s industry index and the significant reduction in inflation may boost investor confidence in the Australian economy, potentially providing support for the Australian dollar. However, the upcoming high-impact Australian GDP and international trade data could further influence market sentiment significantly. On the other hand, despite the decrease in U.S. manufacturing orders, the rise in job openings reflects resilience in the labor market, which could support the U.S. dollar. As a result, the AUDUSD pair may remain in consolidation as traders await these critical economic updates, with potential fluctuations influenced by the forthcoming Australian economic releases.

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What can we expect from AUDUSD today?

AUDUSD on Tuesday dropped -0.39% to 0.64631. 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 0.64397 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.65000 or trades above daily pivot 0.64699. Break above could target R1 at 0.64932. While to the downside, we are looking at 0.64397 (S1) and daily low of 0.64465 as support levels. AUDUSD need to break on either side to indicate a short-term bias. A close below 0.64465 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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