The Australian Dollar experienced a decline amidst a strengthening US Dollar while awaiting the speech of Fed Chair Powell
FUNDAMENTAL OVERVIEW:
- The Australian Dollar continues its downward trend amidst a strengthened US Dollar on Friday.
- The ASX 200’s decline may have contributed to the weakening of the Australian Dollar.
- The S&P Global Manufacturing PMI also surged to 52.5, surpassing expectations of 51.7 and the previous reading of 52.2.
For the second day in a row, the Australian Dollar (AUD) weakened on Friday as the US Dollar (USD) strengthened. This follows mixed preliminary Purchasing Managers Index (PMI) data from S&P and robust weekly Jobless Claims from the United States (US).
The Australian Dollar faces downward pressure due to the ASX 200 Index’s decline. Despite Wall Street’s record highs across all major benchmarks, Australian equities, particularly in energy and consumer stocks, experienced losses, contributing to the Australian Dollar’s downward trend.
Despite decreased US Treasury yields, the US Dollar Index (DXY) persists in its upward trajectory. However, the US Dollar encounters hurdles as the Federal Reserve (Fed) maintains projections for three interest rate cuts in 2024. There’s a consensus indicating the initiation of an easing cycle by June, with the timing of subsequent cuts dependent on forthcoming data.
In February, Australian Employment Change witnessed a significant surge to 116.5K, exceeding the anticipated 40.0K and the previous figure of 15.3K. Meanwhile, Australia’s Unemployment Rate dropped to 3.7%, below the expected 4.0% and the previous 4.1%.
AUD/USD TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
AUD/USD is trading within a down channel.
AUD/USD is positioned below all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Selling zone, while the Stochastic oscillator suggests a Negative trend.
Immediate Resistance level: 0.6532
Immediate support level: 0.6516
HOW TO TRADE AUD/USD
Following a notable rise, AUD/USD experienced a subsequent decline and entered a consolidation phase within a certain range. Presently, the price is descending towards a crucial support level. A breach of this level could lead to a further decline towards the next significant support level, situated at the 61.8% Fibonacci retracement.