AUDUSD Forecast and News
AUD/USD eases to 0.6400 amid mixed Australian PMIs, firmer USD
AUD/USD is trading close to 0.6400, on the defensive in the Asian trading on Friday. The Aussie remains weighed down by the Fed's hawkish stance-led sustained US Dollar strength and mixed Australian PMI readings. Focus on US PMIs.
Latest AUD News
Technical Overview
The AUD/USD rebounded from its weekly lows and returned to the 20-day Simple Moving Average (SMA) at 0.6430. This upward movement from the lows is seen as a positive sign for the Aussie, indicating a potential stabilization after the sharp reversal from above 0.6500. The pair continues to trade within a wide range, oscillating between 0.6350 and 0.6500.
On the 4-hour chart, the price has risen above an upward trendline and also surpassed the 0.6420 level. If the rebound continues, the next resistance stands at 0.6445, which is a horizontal level and the 20-SMA. Technical indicators offer mixed signals, influenced by the rebound. However, a consolidation below 0.6400 would weaken the outlook for the Aussie, suggesting a possible test of the critical area around 0.6350. Prior to the Asian session, consolidation between 0.6410 and 0.6450 appears likely.
Support levels: 0.6400 0.6370 0.6350
Resistance levels: 0.6445 0.6475 0.6505
Fundamental Overview
The AUD/USD recovered during the Asian session and climbed back above 0.6400 as the US Dollar corrected to the downside following the rally from the Federal Reserve meeting and US data. Market conditions remain volatile, and incoming data could continue to cause price fluctuations.
The FOMC's hawkish pause triggered a rally in the US Dollar, which persisted until Thursday's American session. The AUD/USD pair reached a low point at 0.6385, the lowest level in a week. Economic data from the US showed a mixed picture, with initial Jobless Claims falling to 201K and Continuing Claims declining to 1.662 million, reaching their lowest levels since January; and the Philly Fed tumbled to -13.5 in September from -0.7.
The US Dollar initially peaked after the data but then reversed direction as US yields pulled back from multi-year highs and stock markets stabilized on Wall Street. Market conditions remain volatile, potentially favoring erratic moves.
On Friday, the preliminary figure for the Australian S&P Global PMI for September will be released. Later in the day, the US PMIs are scheduled. During Asian hours, the Bank of Japan meeting could trigger some action if it surprises markets. Market sentiment will also be critical for the pair.
SPECIAL WEEKLY FORECAST
Interested in weekly AUDUSD forecasts? Our experts make weekly updates forecasting the next possible moves of the aussie-dollar pair. Here you can find the most recent forecast by our market experts:
AUD/USD: Interim top confirmed, 0.7000 at risk Premium
The AUD/USD pair kept falling in the last few days, reaching a fresh multi-week low of 0.7263 on Friday, to close the trading week a handful of pips above it.
Big Picture
AUDUSD Bullish Themes
AUDUSD Bearish Themes
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Editors' picks
EUR/USD consolidates near six-month low around 1.0650
EUR/USD continues the downward trajectory, trading lower around 1.0640 during the Asian session on Friday. The improved US Dollar (USD) exerts downward pressure on the pair, which could be attributed to the upbeat US Treasury yields.
GBP/USD hangs near multi-month low, seems vulnerable below 1.2400 ahead of UK/US PMIs
The GBP/USD pair struggles to capitalize on the previous day's modest bounce from the 1.2230 area or a nearly six-month low and oscillates in a narrow trading band during the Asian session on Friday. Spot prices remain below the 1.2300 round-figure mark and seem vulnerable to prolonging a well-established downtrend witnessed over the past two months or so.
USD/JPY extends recovery toward 148.00, BoJ in spotlight
USD/JPY is extending recovery toward 148.00 early Friday as bulls stay motivated ahead of the key Bank of Japan (BoJ) interest rate decision. The BoJ is unlikely to adjust its policy settings. The policy guidance, however, will hold the key for the next direction of the pair.
Gold recovers its losses above $1,910, eyes on US PMI data
Gold price recovers some lost ground around $1,920 amid the USD demand. Hawkish comments from Federal Reserve (Fed) Chair Powell drags XAU/USD price lower. Investors will closely watch the preliminary US S&P Global/CIPS PMI data.
WTI drops to $88.80, near a weekly low amid the Fed's hawkish remarks
Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $88.80 so far on Thursday. WTI prices face some follow-through selling to nearly a weekly low of 88.60 after the Federal Reserve (Fed) held the interest rate unchanged and delivered hawkish comments on Wednesday.
Majors
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Signatures
AUDUSD YEARLY FORECAST
How could AUDUSD move this year? Our experts make an AUDUSD update forecasting the possible moves of the aussie-dollar pair during the whole year. Don't miss our 2023 AUDUSD forecast!
AUDUSD FORECAST 2023
The Australian Dollar is facing headwinds yet again against the US Dollar, as the central bank divergence theme is back in play in early 2023. The US Federal Reserve (Fed) is expected to deliver further rate increases than previously expected while the Reserve Bank of Australia (RBA) is nearing the end of its tightening cycle.
Leading momentum indicators retain their hold in the bearish territory, suggesting that the AUD/USD pair is likely to remain a ‘sell on rallies’ trade in the 2023 year ahead.
MOST INFLUENTIAL POLITICAL EVENTS IN 2023 FOR AUDUSD
AUD/USD’s recovery from the last quarter of 2022, fuelled by China’s re-opening-led optimism, seems to have lost traction. Hawkish Federal Reserve expectations combined with renewed geopolitical fears surrounding the United States, Russia and China and the downward pressure on commodities prices could leave the Aussie pair vulnerable in the balance of this year.
About AUDUSD
AUDUSD, The 'Aussie'
The AUDUSD pair, also called the “Aussie”, tells the trader how many US dollars (the quote currency) are needed to purchase one Australian dollar (the base currency). This currency pair is also known as the "Aussie". Together with the New Zealand Dollar and the Canadian Dollar, the AUD is a commodity currency, that is a currency whose country's exports are largely comprised of raw materials (precious metals, oil, agriculture, etc.).
The interest rates set by the Reserve Bank of Australia (RBA) have been among the highest of industrialized countries and the relatively high liquidity of the AUD has made it an attractive tool for carry traders looking for a currency with the highest yields. These factors made the AUD very popular among currency traders.
AUDUSD CORRELATIONS
Australia is a big exporter to China and its economy and currency reflect any change in the situation in that country. The prevailing view is that the Australian Dollar offers diversification benefits in a portfolio containing the major world currencies because of its greater exposure to Asian economies.
This correlation with the Shanghai stock exchange is to be added to the correlation it has with gold. The pair AUDUSD often rises and falls along with the price of gold. In the financial world, gold is viewed as a safe haven against inflation and it is one of the most traded commodities.
ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE AUDUSD
The AUDUSD news can be seriously affected by the decisions taken by these organizations and people:
- Reserve Bank of Australia (RBA) that issues statements and decides on the interest rates of the country. Its president is Philip Lowe.
- Australian Government and its Department of Finance that implement policies that affect the economy of the country.
- The US Government: events as administration statements, new laws and regulations or fiscal policy can increase or decrease the value of the US Dollar and the currencies traded against it, in this case, the Australian Dollar.
- Fed, the Federal Reserve of the United States whose president is Jerome Powell. The Fed controls the monetary policy, through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis.
In terms of economic data, as for most currencies, the AUDUSD traders have to keep an eye on:
- GDP (Gross Domestic Product), the total market value of all final goods and services produced in a country. It is a gross measure of market activity because it indicates the pace at which a country's economy is growing or decreasing. Generally speaking, a high reading or a better than expected number is seen as positive for the AUD, while a low reading is negative.
- Inflation measured by key indicators as the CPI (Core Price Index) and the PPI (Production Price Index), which reflect changes in purchasing trends.
- Current Trade Balance, a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. If a steady demand in exchange for AUD exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the AUD.
Philip Lowe
Philip Lowe is Governor of the Reserve Bank of Australia. Dr Lowe holds a PhD from the Massachusetts Institute of Technology and a B.Comm (Honours) in Economics/Econometrics from the University of New South Wales. He has authored numerous papers, including on the linkages between monetary policy and financial stability. He commenced as Governor on 18 September 2016.
Lowe on RBA'S Profile and Wikipedia
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
RBA NEWS & ANALYSIS
FED NEWS & ANALYSIS
ASSETS THAT INFLUENCE AUD/USD THE MOST
- Currencies: NZD and JPY (New Zealand and Japan are important regional partners of Australia). Other important group of influent pairs includes: EUR/USD, GBP/USD, USD/JPY, USD/CHF, NZD/USD and USD/CAD.
- Commodities: The most important is Gold, as already explained above, but also Iron Ore and Natural Gas.
- Bonds: GACGB10 (Australian Government Bonds Generic Yield 10 Year), GNZGB10 (New Zealand Government Bond 10 Year) and T-NOTE 10Y (10 year US Treasury note).
- Indices: S&P/ASX 200 (stocks of the Australian Securities Exchange), S&P/TSX Global Gold Index (includes producers of gold and related products at the Toronto Stock Exchange).