AUD/USD ANALYSIS & TALKING POINTS
- Soft Chinese CPI and safe haven demand for USD weighs on AUD.
- US data under the spotlight later today.
- New yearly lows looming for AUD/USD?
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AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP
The Australian dollar stays subdued close to yearly lows after the Fed’s higher for longer narrative gains traction. US CPI showed some stickiness in core metrics although rate hike expectations did not change much from a Federal Reserve standpoint. Ongoing geopolitical tensions between Israel-Palestine in the Middle East could see riskier currencies like the AUD come under pressure in favor of safe haven currencies like the US dollar.
Weak Chinese data this morning (see economic calendar below) has limited Aussie upside via the CPI report highlighting the nation’s economy I still struggling despite stimulus measures by the Chinese government.
Later today, US specific factors will be in focus once again from Fed speak and the Michigan consumer sentiment release.
AUD/USD ECONOMIC CALENDAR (GMT +02:00)
Source: DailyFX economic calendar
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TECHNICAL ANALYSIS
AUD/USD DAILY CHART
Chart prepared by Warren Venketas, TradingView
Daily AUD/USD price action above shows the pair unable to move out of the current downtrend and could expose the November 2022 swing low at 0.6272 and beyond. I don’t’ expect too many changes this week as markets prepare for next week’s key data including the Australian job report and China GDP.
Key resistance levels:
- 0.6500
- 0.6459
- 50-day moving average (yellow)/Trendline resistance
- 0.6358
Key support levels:
- 0.6272
- 0.6170
IG CLIENT SENTIMENT DATA: BEARISH (AUD/USD)
IGCS shows retail traders are currently net LONG on AUD/USD, with 83% of traders currently holding long positions.
Download the latest sentiment guide (below) to see how daily and weekly positional changes affect AUD/USD sentiment and outlook.
Introduction to Technical Analysis
Market Sentiment
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