Quick look
- AUD/USD traded at 0.6612, facing minor losses after a -0.19% drop influenced by global risk aversion and anticipation of US inflation data.
- Upcoming US and Australian data, including the US CPI and Australia’s consumer and business confidence reports, are set to influence the pair’s trajectory.
- Technical analysis suggests a potential pullback, with key support and resistance levels outlined for near-term trading.
- Mixed influences from US interest rate expectations, China’s economic developments, and the RBA’s cautious stance provide a complex backdrop.
- Future direction hinges on inflation data outcomes, Chinese economic measures, and central bank policies, with significant levels identified for both bullish and bearish scenarios.
The AUD/USD pair begins with slight losses in the Asian session, following a -0.19% drop on Monday due to a risk-off mood among traders. This cautious stance comes ahead of the awaited US inflation report. The New York Fed’s inflation expectations remained stable at 3%. Attention is now focused on the US BLS’s report. This report could potentially show a February inflation rise to 3.1% year-on-year. If inflation figures are higher than expected, it could lead to further AUD/USD declines. Such declines would affect bets on the US Federal Reserve easing policy. Conversely, if data are lower than expected, it may prompt discussions about easing policy. These discussions could happen as early as the Fed’s May meeting. In Australia, data, including the ANZ and NAB confidence polls and building permits, are crucial. They play a critical role in shaping the currency pair’s path.
Bearish Signs at 0.6600, Key Levels to Watch
The technical outlook for AUD/USD hints at possible bearish momentum, with the formation of an ‘evening star’ pattern suggesting a pullback. Immediate support is eyed at 0.6600, with further downside potential towards the 50-day and 100-day moving averages. Resistance levels to watch include the March 11 high at 0.6627 and the March 8 peak at 0.6670. The pair’s direction may also be swayed by the US dollar’s movements and US yield trends.
Global Factors Shape AUD/USD’s Complex Path
External factors, such as China’s economic performance and commodity prices, notably iron ore, contribute to the AUD/USD dynamics. The Reserve Bank of Australia’s cautious stance, compared to the Fed’s anticipated policy adjustments, introduces additional complexity. The AUD/USD could find support or face resistance, with critical levels outlined for both scenarios. The pair’s medium to long-term direction will depend on forthcoming economic data, central bank policies, and global market sentiments.
