CFD Trading Rate Australian Dollar vs US Dollar (AUDUSD)

• AUD/USD edges up to 0.6539 after US producer inflation hints at easing pressures.
• US Jobless Claims drop, indicating a resilient labor market despite mixed economic signs.
• Federal Reserve officials express concerns over inflation trends, influencing market expectations about the timing and extent of future rate cuts.

The Australian Dollar recovered some territory against the US Dollar yet fell shy of reclaiming key technical resistance levels after Thursday’s US inflation data capped the Greenback's advance. As the Asian session begins, the AUD/USD trades at 0.6539, up by a minimal 0.02% at the time of writing.

AUD/USD shows a slight recovery after US PPI data underperforms expectations

On Thursday, the US Department of Labor revealed March’s Producer Price Index (PPI) with figures registering a 0.2% MoM increase, which is below the anticipated 0.3%. Similarly, the core PPI, which excludes volatile food and energy prices, also recorded a 0.2% increase, falling short of both estimates and the previous month's figure.

Annually based figures showed the PPI increasing by 2.1%, less than expected but up from February's 1.6%. Meanwhile, the core PPI over the same period stood at 2.4%, exceeding both forecasts and the figure from the prior month.

Other data revealed that the number of Americans filing for unemployment benefits fell, as Initial Jobless Claims for the week ending April 6 dipped from 222K to 211K, below estimates of 215K.

Given Thursday’s economic data's mixed outlook, AUD/USD traders booked profits following Wednesday’s plunge of 1.75%, which dragged spot prices to a fresh weekly low of 0.6498.

Elsewhere, Federal Reserve officials remain in a wait-and-see mode, led by New York Fed President John Williams, who commented that recent inflation data is disappointing. Richmond Fed Thomas Barkin added that “inflation data raise the question if we are seeing a shift.” Finally, Boston Fed Susan Collins added that she still sees rate cuts in 2024, though they could be fewer than projected.

In that regard, futures traders of Federal funds rates (FFR) are projecting that the Fed would ease policy twice, as shown by data from the Chicago Board of Trade (CBOT). The December 2024 contract depicts traders expect the FFR to end at 4.97%.

AUD/USD Price Analysis: Technical outlook

From a technical perspective, the AUD/USD tilted slightly bearish after cracking the confluence of the 50 and 200-day moving averages (DMAs) at 0.6541. If buyers conquer that level, the next resistance will be 0.6600. However, failure to do so will drive the exchange rate below 0.6500, opening the door to test April’s 1 low of 0.6483, ahead of the February 13 low of 0.6442.

• AUD/USD finds intermediate support neat 0.6500, more downside remains likely.
• The US Dollar strengthens as market push back Fed rate cut expectations for June.
• Australia’s consumer inflation expectations for next 12 months rose to 4.6%.

The AUD/USD pair finds an interim support near the psychological level of 0.6500 in Thursday’s early European session. The Aussie asset is expected to continue the downside move as faded market expectations for the Federal Reserve (Fed) beginning to reduce interest rates in the first half of this year has dampened appetite for risk-sensitive currencies.

S&P 500 futures have posted nominal gains in the Asian session. While the overall market sentiment is downbeat as investors shift focus to the September policy meeting when the Fed could pivot to rate cuts. Prospects for Fed early rate cuts have waned as the United States inflation for March turned out sticky. The US Dollar Index (DXY) jumps to 105.20, approaching five-month high at 106.00.

The US Bureau of Labor Statistics (BLS) reported on Monday that annual and monthly core Consumer Price Index (CPI), which strips of volatile food and energy prices, rose steadily by 3.8% and 0.4%, respectively, suggested that rate cuts are not appropriate currently.

Meanwhile, expectations for the Reserve Bank of Australia (RBA) reducing interest rates sooner have eased due to a significant increase in consumer inflation expectations. The Melbourne Institute reported that inflation expectations for next 12 months accelerated to 4.6% from prior reading of 4.3%.

AUD/USD witnesses an intense sell-off after failing to sustain the breakout of the Descending Triangle chart pattern formed on a daily timeframe. The Aussie asset is declining towards the horizontal support of the aforementioned pattern plotted from March 5 low at 0.6477.

The Aussie asset falls below the 20-day Exponential Moving Average (EMA) trading near 0.6550, suggesting weak demand for the Australian Dollar.

The 14-period Relative Strength Index (RSI) falls sharply after failing to climb above 60.00, indicating limited upside.

Investors might build fresh shorts if the asset drops below March 28 low at 0.6485. Profits on shorts would be booked near February 13 low around 0.6440 and the round-level support of 0.6400.

In an alternate scenario, fresh upside would appear if the asset breaks above March 21 high at 0.6635. This will drive the asset toward March 8 high at 0.6667, followed by the round-level resistance of 0.6700.

AUD/USD daily chart

• AUD/USD is seen consolidating Wednesday’s post-US CPI slump to over a one-week low.
• Bets that the Fed will delay cutting rates underpin the USD and cap the upside for the pair.
• Softer Chinese inflation figures do little to influence the Aussie or provide any impetus.

The AUD/USD pair oscillates in a narrow trading range during the Asian session on Thursday and consolidates the previous day's hotter US CPI-inspired slump to over a one-week low. Spot prices hold steady above the 0.6500 psychological mark and move little following the release of inflation figures from China.

The National Bureau of Statistics reported that China’s consumer inflation declined more than estimated, by 1% in March as compared to the previous month's rise of 1%. On a yearly basis, the headline CPI decelerated to 0.1% from 0.7% in the previous month, missing expectations for a 0.4% increase. Furthermore, the Producer Price Index, which measures wholesale prices at the factory gate, dropped by 2.8% from a year ago, marking the 18th consecutive month of decline and indicating persistent deflationary pressures. This, to a larger extent, overshadows a jump in Australian consumer inflation expectations to 4.6% for April from 4.3% previous and does little to provide any meaningful impetus to the Aussie.

The US Dollar (USD), on the other hand, ticks lower amid some profit-taking after the previous day's sharp spike to the highest level since November 14 and lends some support to the AUD/USD pair. Any meaningful USD corrective decline, however, still seems elusive in the wake of expectations that the Federal Reserve (Fed) will delay cutting interest rates amid sticky inflation. This, along with a generally weaker tone around the equity markets, should act as a tailwind for the safe-haven buck and cap the risk-sensitive Australian Dollar (AUD), warranting caution for aggressive bullish traders.

• Australian Dollar faces a significant downturn as US inflation figures outpace forecasts, boosting the US Dollar and Treasury yields.
• Traders adjust Fed rate cut projections based on new inflation insights, with a less aggressive easing strategy anticipated.
• Upcoming economic reports, includes China's inflation data and the US PPI.

The Australian Dollar posted losses of more than 1.50% on Wednesday against the US Dollar following the release of a hotter-than-expected inflation report in the United States (US). Traders have begun to price in fewer rate cuts by the US Federal Reserve, a bullish signal for the Greenback. Therefore, the AUD/USD trades at 0.6511, virtually unchanged, as Thursday’s Asian session commences.

AUD/USD falls sharply to 0.6511, reacting to US CPI data

Mach’s Consumer Price Index (CPI) in the US exceeded estimates of 0.3% MoM in headline and core, with both readings edging a tenth higher at 0.4%. Yearly figures clocked 3.5% YoY in general inflation, crushing February’s data, while core CPI was unchanged at 3.8%. Following the release, US Treasury yields soared, the Greenback rallied, and Wall Street plummeted.

Consequently, interest rate futures traders priced in just two rate cuts, as witnessed by data released by the Chicago Board of Trade (CBOT). The Fed funds rate is projected to end the year at 4.99%.

Later, the March minutes of the Federal Open Market Committee (FOMC) revealed that “almost all participants judged that it would be appropriate to move policy to a less restrictive stance at some point this year if the economy evolved broadly as they expected.”

On the Aussie’s front, the economic schedule remains scarce, though traders will watch China’s March inflation report. In the US, further inflation data will be scrutinized, as the Producer Price Index (PPI) is expected to dip, while the number of Americans filing for unemployment benefits is expected to slow down compared to the previous reading.

AUD/USD Price Analysis: Technical outlook

From a price action standpoint, the AUD/USD shifted bearish bias and will face first support at the 0.6500 psychological figure. The Relative Strength Index (RSI) turning bearish, along with the break of key support levels, suggests that further downside is seen.

The AUD/USD first support would be the April 1 low of 0.6481, followed by the February 13 swing low at 0.6443. If those two levels are cleared, the pair will be trading at lower levels for the new year-to-date (YTD), with sellers eyeing the 0.6400 figure.

In the event buyers move in and reclaim the 200-DMA at 0.6603, look for a test of the next supply zone at 0.6631.

• Strong US CPI figures have sent the Aussie tumbling.
• US CPI accelerated 0.4% in March against expectations of a 0.3% reading. The yearly inflation jumps to 3.5% from 3.2% in the previous month
• AUD/USD is under pressure again, with support levels at 0.6480 and 0.6445 on the bears’ focus

Australian Dollar posted a strong reversal on Wednesday. The higher-than-expected US inflation levels have endorsed the Fed’s “higher for longer” stance, crushing risky assets like the Aussie.

Consumer inflation accelerated in the US in March, with the headline figures accelerating to 0.4%, against expectations of a 0.3% reading.  Year-on-year, consumer prices rose at a 3.5% pace from 3.2% in February. The Core inflation accelerated to 0.4% from 0.3% in the previous month, while the yearly rate remained steady at 3.8%.

These levels confirm that the Fed has still some work to do to push inflation towards their 2% target, and practically ditch the markets’ view of three rate cuts in 2024 starting in June.

Later today, the Fed monetary policy minutes will be looked at from a different perspective following the CPI data. On Friday the PPI will add further insight into the inflation picture, although Fed’s Bostic and Williams, both on the hawkish side of the committee, might attract investors’ attention.

The technical picture looks increasingly bearish as the pair is on track to post a strong negative candle today. The 0.6480-0.6500 area might support the pair ahead of the big downside target, 0.6445. Resistances are 0.6550 and 0.6635.

• AUD/USD has entered into a sideways range on the short-term charts. 
• The pair has just formed a bearish candlestick at the range highs and is looking poised to weaken. 
• A move back down is possible towards the range lows at 0.6420. 

AUD/USD is trading in the 0.6620s on Wednesday, ahead of key US data. The pair has entered a sideways trend on the 4-hour chart which is used to assess the direction of the short-term trend. 

AUD/USD 4-hour Chart

At the beginning of April price touched the bottom of the range low at 0.6480 and bounced. After that it started climbing back up to the top of the range. 

On Tuesday AUD/USD formed a bearish Shooting Star candlestick pattern at the top of the range in the 0.6640s. Although the following bar was green and therefore did not confirm the Shooting Star, it was nevertheless a negative sign. The pair has since been trading sideways in the 0.6620s. 

Given AUD/USD has been rejected at the range high and formed a bearish candlestick pattern at the same time, there is a risk of a reversal, and the price starting to move back down towards the range lows again, continuing the sideways trend. 

Both the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) momentum indicators are showing bearish divergence at the April 4 and April 9 peaks. Whereas price rose up and made a higher high between that period, both indicators failed to follow suit, indicating weakness. 

RSI has just exited the overbought region which is a further bearish sign. It recommends short-term bullish traders close their long bets and open short positions. 

A break below 0.6495 would help provide confirmatory evidence of a new move lower within the range, with a possible target back down at the 0.6420 range lows. 

The cluster of major Moving Averages are likely to provide support at around 0.6450, and could slow the pace of the sell-off.

A break above the April high at 0.6645 would negate the bearish view and could indicate a breakout, with an initial target at the 0.6668 March highs.

• AUD/USD trades in positive territory near 0.6630 on Wednesday, the highest in two weeks. 
• US March inflation report on Wednesday will be in the spotlight as it might offer some hints about inflation trajectory.
• Commonwealth Bank expected three 25 basis points (bps) interest rate cuts by the end of the year, starting from September. 

The AUD/USD pair posts modest gains near two-week highs of around 0.6630 on Wednesday during the early Asian training hours. The US Dollar (USD) struggles to find a clear direction near the 104.00 mark ahead of the release of the US March Consumer Price Index (CPI) inflation figures and the FOMC Minutes on Wednesday.  

The Chicago Fed President Austan Goolsbee, a prominent dove on the Fed’s board, said on Monday that the recent jobs report was “quite strong”, but the Fed must consider how much longer it can maintain its current interest rate stance without it damaging the economy. Goolsbee added that the Unemployment Rate could go higher if interest rates remain high for too long. Minneapolis Fed President Neel Kashkari penciled in two rate cuts for the year but questioned the need to cut the interest rate if inflation remains sideways.

Chair Jerome Powell and many Fed officials emphasized that the main factor in the central bank's rate-cutting decision is when or whether inflation will return to the Fed’s 2% target. Investors will closely monitor the US CPI inflation data, which might offer some hints about the inflation trajectory and the path of monetary policy. The CPI figure is estimated to show an increase of 3.4% year over year in March. The firmer-than-expected reading could dampen expectations for Fed rate cuts in June, while softer data could fuel speculation for rate reductions.

On the Aussie front, after leaving rates on hold at 4.35% at its March meeting, the Reserve Bank of Australia (RBA) and its governor Michele Bullock didn’t indicate the timing of the easing cycle, but investors have already priced in when they believe rate cuts could happen. Commonwealth Bank expected three 25 basis points (bps) interest rate cuts by the end of the year starting from September, while Westpac believes interest rate cuts will begin in September and NAB and ANZ believe it won’t be until November.

• AUD/USD climbs to 0.6635 as US Dollar dips amid upbeat market mood.
• US yields fell as Fed Goolsbee warns about risks to labor market if interest rates remain higher for longer.
• The Australian Dollar will be guided by China’s inflation data for March.

The AUD/USD pair prints a fresh two-week high at 0.6635 in the early American session on Tuesday. The Aussie asset strengthens as the US Dollar extend its downside. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, fell to 103.95 despite traders paring big bets supporting the Federal Reserve (Fed) pivoting to rate cuts from the June meeting.

The S&P 500 is expected to open on a bullish note, suggesting cheerful market sentiment. The market sentiment could turn volatile amid uncertainty ahead of the United States Consumer Price Index (CPI) data for March, which will be published on March. The monthly headline and core inflation data are projected to have grown at a slower pace of 0.3% after rising by 0.4% in February. Though price pressures are expected to grow slowly, the pace at which monthly inflation is expected to grow is still higher than 0.17%, which is required for bringing down inflation to the 2% target.

Fed policymakers have been reiterating that it is appropriate to lower interest rates now as they lack confidence that inflation will sustainably return to 2%.

10-year US Treasury yields fell to 4.39% after Chicago Fed Bank President Austan Goolsbee warned that the Unemployment Rate could increase if interest rates remain high for too long.

Meanwhile, the Australian Dollar capitalizes on risk-on sentiment but will dance to the tunes of China’s CPI data for March, which will be published on Thursday. Monthly inflation is expected to have dipped 0.5% after rising 10% in February. The annual CPI data is anticipated to have increased moderately by 0.4% against the former reading of 0.7%. A decline in the inflation data indicates weak consumer spending.

As a proxy for China’s economic outlook, the Australian Dollar could face pressure if the China CPI data TURNS OUT softer than expected.

• AUD/USD up due to better sentiment, USD dip amid mixed Wall Street results.
• US inflation steady; Fed's positive economy outlook influences currencies.
• US inflation, Australian consumer confidence data critical for economic assessment.

The Australian Dollar posted solid gains on Monday, rising 0.42% against the US Dollar amid an improvement in risk appetite and a light economic calendar. The AUD/USD pair trades at 0.6604, virtually flat, as Tuesday’s Asian session begins.

AUD/USD sees a modest uptick after gaining on Monday, ahead of US CPI

Wall Street’s session concluded with a mixed bag of results. While the S&P 500 and the Dow Jones registered losses, the Nasdaq Composite saw a rise. This divergence was accompanied by a 0.16% decline in the Greenback, as indicated by the US Dollar Index (DXY), which stands at 104.12.

The US economic docket was light, except for the New York Fed Consumer Inflation Expectations for March, rising by 3%, unchanged compared to February’s data. Chicago’s Fed President Austan Goolsbee began the Fed parade on Monday, saying that the economy is on golden path, while emphasizing the economy remains strong due to a tight labor market.

US and Aussie economic data

In the meantime, traders are awaiting the latest inflation report in the United States (US), to have a better grasp of the disinflation process. If prices continue to trend lower, that would be negative for the buck and positive for risk-perceived assets, like the Aussie Dollar.

On Australia’s front, market players would be entertained by the Westpac Consumer Confidence and the NAB Business Confidence, both figures from March.

AUD/USD Price Analysis: Technical outlook

On Monday, the AUD/USD had risen above a downslope resistance trendline at around the 0.6580/90 area, which opened the door for buyers to reclaim 0.6600. They’re gathering momentum, as depicted by the Relative Strength Index (RSI), aiming north, with enough room to enter overbought conditions. If the pair surpasses the April 4 high of 0.6619, the next stop would be intermediate resistance at 0.634, the March 21 high ahead of March 8, and the latest higher high at 0.6667.

On the other hand, the AUD/USD first support would be the 100-day moving average (DMA) at 0.6600. A breach of the latter will expose the April 5 low of 0.6549, followed by the confluence of the 50/200-DMA at 0.6543.

• AUD/USD loses ground amid higher US Dollar after stronger NFP figures on Friday.
• US Nonfarm Payrolls increased to 303K in March, surpassing the expected 200K.
• The further gains in copper and oil prices could support the Australian Dollar.

AUD/USD kicks off the week with extending losses for the second successive session, with the pair trading lower around 0.6560 during the Asian session on Monday. The US Dollar (USD) strengthens, supported by higher US Treasury yields, thereby exerting downward pressure on the AUD/USD pair.

The US Dollar Index (DXY) trades around 104.40, at the time of writing, propelled by a surprising beat from the Nonfarm Payrolls (NFP) report. The robust labor market performance, highlighted by the March report surpassing expectations, reinforces the bullish outlook for the US Dollar.

Despite the positive momentum in the US economy, the likelihood of a rate cut in June from the Federal Reserve (Fed) remains high. The market continues to project a June rate cut with approximately a 70% likelihood, followed by an estimated total easing of roughly 75 basis points (bps) throughout 2024.

The US Bureau of Labor Statistics (BLS) reported a significant increase of 303,000 jobs in March, surpassing the expected 200,000. However, February's previous Nonfarm Payrolls (NFP) growth of 275,000 was revised downward to 200,000. Additionally, US Average Hourly Earnings rose by 0.3% month-over-month in March, meeting expectations. The previous reading was 0.2%. On a yearly basis, there was an increase of 4.1%, aligning with the market consensus but slightly lower than the previous reading of 4.3%.

Market participants are likely closely monitoring higher copper and oil prices, which could potentially provide support for the Australian Dollar (AUD). The Australian Dollar (AUD) faced challenges following the release of unchanged Final Retail Sales and downbeat Trade Balance data from Australia on Friday.

Australia recorded its smallest Trade Surplus in five months in February, attributed to a decrease in iron ore exports. In March, the Reserve Bank of Australia (RBA) maintained its cash rate at a 12-year high of 4.35% for the third consecutive meeting. However, the RBA omitted a previous warning that further rate hikes could not be ruled out.

• Aussie's reversal has been contained above 0.6555, which leaves the positive momentum intact.
• The pair withstood the bullish US Dollar reaction after the NFP release. 
• A clear break of the 0.6620-0.6630 resistance area would confirm a trend shift.

Australian Dollar’s reversal from Thursday’s highs has been contained above the 0.6555 support area, despite the strong US Dollar reaction to the upbeat US employment data. This keeps bulls hopeful of a deeper recovery, with their focus on the resistance area above 0.6600.

US Nonfarm Payrolls increased beyond expectations in March to close a strong first quarter, although a certain moderation observed in the yearly wage growth maintains hopes of Fed cuts alive. This has put a lid on the USD rally which leaves the pair’s bullish momentum intact.

The weekly chart is forming a large bullish candle which signals a potential change in the broader bearish trend. A break of the 0.6620-0.663030 resistance area would confirm the trend change and expose the 0.6670 top. Support levels remain at 0.6555 and 0.6500.

• AUD/USD briefly broke out of a descending channel and rallied. 
• The rally was cut short, however, and the pair retreated back inside the channel.  
• If AUD/USD rebreaks above the previous high of the initial breakout rally, it will be a bullish sign. 

AUD/USD has been falling in a descending channel since the March 8 high at 0.6667.

Over the last three days the pair has risen up from the base of the channel to the highs and briefly broke upper borderline on Thursday before retreating back inside. 

Australian Dollar versus US Dollar: 4-hour chart

A move back above the post-breakout rally peak, at 0.6620, however, would confirm two things. 

First, that the breakout from the channel was a valid bullish breakout, likely to extend higher. 

Second, that the short-term trend had probably reversed from bearish to bullish.

Such a move would probably lead to a move up to a conservative target at 0.6670, calculated as the 0.618 Fibonacci extension of the height of the channel extrapolated from the breakout point higher. 

Further strength could lead to the achievement of the second target at 0.6715, which is the full height (Fib. 1.000) of the channel extrapolated higher.

• Aussie Dollar gains on cooling US job market signs, amid geopolitical tension.
• Fed's mixed signals reflect caution in policy easing, considering inflation, growth.
• Australian trade, US job data ahead, crucial for AUD/USD direction amid global economic scrutiny.

The Australian Dollar posted solid gains of more than 0.30% on Thursday against the Greenback after economic data from the United States (US) indicated the labor market is cooling. Federal Reserve’s officials crossed the newswires, giving mixed signals, despite agreeing they would ease policy at some point. The AUD/USD trades at 0.6582 as Friday’s Asian session begins.

Scottish US jobs data, boosted the Aussie’s Dollar

 Risk-sensitive currencies suffered a retracement late in Thursday’s session amidst rising geopolitical risks following Israel’s attack on Iran's embassy in Syria. US Treasury yields posted back-to-back days of losses, while the Greenback is virtually unchanged at 104.20.

US jobs data was soft, as more Americans than expected applied for unemployment benefits. Initial Jobless Claims for the last week rose to 221K, exceeding estimates and previous numbers of 214K and 212K, respectively. Further data revealed the US trade deficit widened in February, missing estimates and January’s print.

Fed officials' remarks on Thursday

Federal Reserve officials were active on Thursday, grabbing some headlines. Firstly, Philadelphia Fed Patrick Harker said that inflation is too high, and was followed by Richmond Fed President Thomas Barkin. He said he’s optimistic about achieving a soft landing, adding that tight policy would slow down the economy.

Moreover, Chicago’s Fed Austan Goolsbee said the Fed’s dual mandate risks are in better balance, adding that keeping restrictive policy for too long could weigh on employment. Recently, Minnesota’s Fed Neil Kashkari commented that he doesn’t see a reason to cut rates with a strong economy while ditching one rate cut, eyeing just two.

Lastly but not least, Cleveland’s Fed Chair Loretta Mester said she thought growth would be above trend this year and added that the rhythm of lowering inflation would be slower than last year.

Aussie’s and US economic dockets

The economic calendar will feature Australia’s Balance of Trade for February, which is expected to print a surplus of A$10.4 billion, below last month’s A$11.027 billion. On the US front, traders brace for March’s Nonfarm Payrolls figures, with the jobs data expected to show the economy added more than 200K jobs to the robust economy. The Unemployment Rate is foreseen to stand pat at 3.9% YoY; while Average Hourly Earnings could rise in monthly figures, but edge lower in the twelve months to March.

• AUD/USD extends its winning streak on weak US Dollar.
• The US Dollar weakens as poor US ISM Services PMI dampens the economic outlook.
• Surging global commodity prices strengthen the Australian Dollar.

The AUD/USD pair extends its winning spell for the third trading session on Thursday. The Aussie asset rallies to the round-level resistance of 0.6600 as the US Dollar weakens due to the unexpected decline in the United States Services PMI data for March, reported by the Institute of Supply Management (ISM) on Wednesday.

The US Dollar Index (DXY), which tracks the US Dollar’s value against six major currencies, extends its downside to 104.00. The US ISM reported that the Services PMI missed expectations, dropping to 51.4 from expectations of 52.7 and the former reading of 52.6. Subindexes such as New Orders and Prices Paid also eased sharply, impacting the US economic outlook.

Going forward, investors will focus on the US Nonfarm Payrolls (NFP) data for March, which will be published on Friday. The labor market data will influence market expectations for Fed rate cuts, which are currently expected in the June meeting.

Meanwhile, the Australian Dollar strengthens as global commodity prices witness a sharp upside. Growing expectations for China’s economic recovery due to reviving domestic demand have also boosted demand for the Australian Dollar.

AUD/USD attempts to deliver a breakout of the Descending Triangle chart pattern formed on a daily timeframe. The downward-sloping border of the aforementioned pattern is placed from March 8 high at 0.6667 while horizontal support is plotted from March 5 low at 0.6477. The chart pattern exhibits a sharp volatility contraction and a breakout can happen in any direction.

The Aussie asset sustains above the 20-day Exponential Moving Average (EMA) trading near 0.6550, suggesting upbeat demand for the Australian Dollar.

The 14-period Relative Strength Index (RSI) rebounds to 60.00. A bullish momentum would trigger if the RSI manages to climb above the aforementioned level.

More upside would appear if the asset breaks above March 21 high at 0.6635. This will drive the asset toward March 8 high at 0.6667, followed by the round-level resistance of 0.6700.

On the flip side, investors might build fresh shorts below March 28 low at 0.6485. Profits on shorts would be booked near February 13 low around 0.6440 and the round-level support of 0.6400.

AUD/USD daily chart

• AUD/USD edges up, buoyed by Fed's rate talk and mixed US data.
• Fed's data-focused rate policy, strong US job market, and services data are headwinds for the US Dollar.
• Australia's services sector gains boost AUD amid global economic uncertainties.

The Aussie Dollar posted solid gains against the US Dollar on Wednesday, boosted by falling US Treasury yields and a soft US Dollar. Federal Reserve policymakers grabbed the headlines, while US economic data was mixed, with a strong ADP report but softer PMIs. The AUD/USD trades at 0.6565, posting minimal gains of 0.02% early during Thursday’s Asian session.

AUD/USD sees slight uptick as dovish Federal Reserve remarks and uneven US data fuel optimism in Forex markets.

On Wednesday, the market was attentive to the remarks of Fed Chair Jerome Powell, who reiterated the US central bank's readiness to cut rates, albeit with a data-dependent approach. Atlanta Fed President Raphael Bostic's statement, supporting a rate cut in the last quarter of 2024, also drew significant attention.

Lately, Adriana Kugler, one of the newest Fed Governors appointed to the board, stated that the disinflation process would continue, and that would warrant lowering rates at least three times toward the last quarter of 2024.

The Aussie Dollar also benefited from an upbeat market mood as Wall Street snapped two days of losses. US Treasury yields finished flat, a headwind for the American currency. The US Dollar Index (DXY) tumbles more than 0.50%, down to 104.22.

Elsewhere, the March ADP report revealed that private hiring increased by 184K, exceeding estimates and forecasts. In the meantime, the US S&P Global and the ISM Services PMIs, were a touch softer.

In the meantime, Aussie’s data revealed the Judo Bank Services PMI improved from 53.5 in February to 54.4 in March. The report highlighted “This is the fourth consecutive month of improvement, with the services output index increasing by 8.4 points, the largest gain in the series outside of recovery from lockdowns.”

AUD/USD Price Analysis: Technical outlook

From a technical perspective, the AUD/USD shifted to a neutral-upward bias. A ‘bullish harami’ candlestick chart pattern, followed by Wednesday’s large candle breaching the 200-day moving average (DMA) at 0.6543, could pave the way to challenge the 100-DMA at 0.6597, ahead of the 0.6600 mark. The momentum has shifted in favor of the bulls, as the Relative Strength Index (RSI) turned bullish and aims higher.

On the other hand, a drop below the 200-DMA could expose the 0.6500 figure.

• AUD/USD pauses its slide from the March 8 highs following the release of the RBA minutes. 
• The minutes showed risks to the outlook as more balanced and notably did not mention discussing raising interest rates. 
• US data showed a rise in payrolls commensurate with the US’s solid run of employment data. 

The AUD/USD trades marginally higher in the 0.6510s midweek after pivoting and temporarily pausing its almost-month-long broad slide down from the early March 0.6660 highs. 

The key event for the Australian Dollar was the release of the Reserve Bank of Australia (RBA) meeting minutes from the March policy meeting on Tuesday. 

In the minutes, a shift in language was noted by the mention, for the first time, that the Board had not considered the option to raise interest rates. 

On monetary policy, the central thrust appeared to be that the Board agreed “it was difficult to either rule in or out future changes in cash rate,” a statement repeated several times in the minutes.

The balance of risks to the outlook had changed and were “a little more even” than previously, it was noted. 

The minutes showed a shift from a slightly hawkish view to a more “neutral stance,” according to analysts at Westpac. 

In the US, data out on Wednesday showed ADP Employment Change private payrolls registered a rise of 184,000 new workers starting jobs in the month of March, beating analysts’ expectations of 148,000. 

The prior month was revised up from 140,000 to 155,000. The data continued the theme of a robust US labor market, which is likely to support the US Dollar (USD) going forward. 

Other data from Australia showed CoreLogic March house prices rose 0.6%, matching February’s monthly gain, while the Melbourne Institute inflation gauge eased to 3.8% YoY from 4.0% YoY.

• Aussie’s recovery is losing pace, as US macroeconomic data beats expectations.
• US Factory Orders and JOLTS Job Openings endorse the view of a strong economy with a tight labour market.
• Cleveland Fed President, Loreta Mester hints at rate cuts in 2024 but she does not say when.
   

The Australian Dollar bounced up from the 0.6480 support area on Tuesday. Bulls, however, are struggling to find a significant acceptance above the 0.6500 area, which keeps the broader bearish trend intact.

In the US, data from the Census Bureau reported a larger-than-expected recovery in Factory Orders, which confirms the strong momentum of the manufacturing sector, following Tuesday’s bright ISM PMI report.

Beyond that, the US JOLTS Job Openings increased beyond expectations in February. These data have contributed to endorse the view of a strong economy with a tight labour market, which poses a challenge to the Fed's easing plans.

Cleveland Fed President, Loreta Mester, has calmed markets somewhat, hinting at rate cuts later this year but she added that the bank might need more time to confirm that inflation is on its way to the 2% target. Later today, San Francisco Fed CEO, Mary Daly, a moderate hawk, might give some more insight into the bank’s rate outlook.

• AUD/USD faces pressure due to the weak Australian Dollar.
• The RBA didn’t mention the need for more rate hikes in the March’s policy minutes.
• Market sentiment remains downbeat as Fed rate cut expectations for June ease.

The AUD/USD pair struggles to get an auction above the psychological resistance of 0.6500. The Aussie asset is facing pressure despite the US Dollar edging down in Tuesday’s European session after refreshing a four-month high.

The market sentiment shows investors are risk-averse as traders have pared bets favoring Federal Reserve (Fed) rate cuts in the June policy meeting. Considering negative overnight futures, the S&P 500 is expected to open on a bearish note. 10-year US Treasury yields rose sharply to 4.39%. The US Dollar Index (DXY) slips from a fresh four-month high slightly above 105.00 to 104.80.

The near-term appeal of the US Dollar is upbeat due to the firm US economic outlook. The US economy grew at a robust pace of 2.5% in 2023 even though interest rates by the Federal Reserve (Fed) remained historically high. In addition, stronger-than-expected Manufacturing PMI for March has strengthened the outlook further.

On Monday, the US Institute of Supply Management (ISM) reported that the Manufacturing PMI returned to expansion after contracting for 16 straight months.

In today’s session, investors will focus on the US JOLTS Job Openings data for February, which will be published at 14:00 GMT. The economic data will provide fresh cues about the labor demand. US employers are anticipated to have posted 8.74 million job openings, lower than 8.863 million in January.

Meanwhile, the Australian Dollar faces selling pressure as the Reserve Bank of Australia (RBA) policy minutes, released in Tuesday’s Asian session, showed that policymakers do not see the need of more interest rate hikes. In the monetary policy meeting, the RBA kept its Official Cash Rate (OCR) unchanged at 4.35%.

• AUD/USD stays at 0.6490, pressured by surging US Treasury yields and a strengthening US economic outlook.
• Mixed manufacturing PMI readings highlight contrasting economic narratives between the US and Australia.
• Upcoming RBA minutes and comments from central bank officials to offer insights into Australia's monetary policy trajectory.

On Monday, the Australian Dollar registered losses of 0.4% against the US Dollar, sponsored by an improvement in business activity in the United States (US). However, with the Tuesday Asian session beginning, the AUD/USD is virtually unchanged at 0.6490, near the weekly lows at the time of writing.

Australian Dollar struggles for direction against a robust US Dollar, with market eyes on RBA minutes and policy cues.

The economic docket features essential data driving financial markets' price action. Firstly, the Institute for Supply Management (ISM) revealed that March’s Manufacturing PMI improved to expansionary territory for the first time in nearly eighteen months. Figures came at 50.3, exceeding estimates of 48.4 and February’s 47.8. Before the ISM release, S&P Global depicted the US economy as beginning to slow down, as the March number came at 51.9, down from 52.2.

Following the data release, US Treasury yields soared, underpinning the Greenback. The US Dollar Index (DXY), which measures the currency against six peers, aims up 0.42% at 104.96, after briefly peaking above 105.00.

The market reaction is linked to traders cutting bets for a quarter of a percentage point by the Federal Reserve’s June meeting.

Delving into over-the-weekend data, Fed Chair Jerome Powell commented that the US Core PCE aligned with their estimates. He said they need more evidence before cutting rates, adding they aren’t in a hurry to cut rates.

In addition, the Aussie’s Jibun Bank Manufacturing PMI reading for March was 47.3, below estimates of 47.8. According to the report, conditions deteriorated due to falls in new work inflows, leading to a reduction in manufacturing output. This is the second consecutive negative reading in the manufacturing segment.

Upbeat data from China keep the AUD/USD from further sliding, as China’s Caixin PMIs beat estimates in March, with new export orders increasing.

Ahead of the day, AUD/USD traders will dissect the latest Reserve Bank of Australia (RBA) meeting minutes, looking for cues regarding the forward path of monetary policy. As of writing, RBA Assistant Governor Kent is crossing the wires.

AUD/USD Price Analysis: Technical outlook

The AUD/USD seems to have bottomed out at around current levels, yet the Relative Strength Index (RSI) is bearish. If sellers push prices below the March 5 low of 0.6477, look for a pullback toward the February 13 low of 0.6442, ahead of 0.6400. On the flip side, the first resistance would be the 0.6500 mark, followed by the confluence of the 50 and 200-day moving averages (DMAs) at 0.6544.