AUD/USD trades marginally higher ahead of macroeconomic data

AUD/USD is trading in the 0.6600s on Thursday, up three hundredths of a percent in the European session, as traders await key macroeconomic data that could impact the pair.

Both US factory gate prices, or Producer Prices, and US Retail Sales are scheduled for release at 12:30 GMT. They may impact the outlook for inflation and tone the debate around when the Federal Reserve is expected to cut interest rates. 

The Producer Price Index ex Food and Energy (Core PPI), is an important inflation metric, economists expect a drop to 1.9% YoY registered in February from 2.0% in January. On a monthly basis, Core PPI is forecast to rise 0.2% versus the 0.5% advance seen in the previous month. 

The headline Producer Price Index (PPI) is forecast to show a 1.1% YoY gain versus 0.9% in January, and a 0.3% gain MoM, the same as previous. 

US Retail Sales is forecast to rebound in February, registering a 0.8% rise against the 0.8% decline in January. Higher-than-expected sales tend to spur inflation with hawkish implications for interest rate policy and a bullish impact on USD (bearish for AUD/USD).

Technical Analysis: AUD/USD in long-term downtrend

AUD/USD is in a long-term downtrend, producing lower highs and lower lows. 

Australian Dollar vs. US Dollar: Weekly chart

The AUD/USD has just pushed back after touching a major trendline and there is a risk it could fall further, in line with the longer-term downtrend. 

A break below the last swing low of October 2023 at 0.6442 would solidify the bearish outlook and probably see prices ease further to around the 0.6170 October 2022 lows. 

Alternatively, a break above the 0.6871 December 2023 high would indicate the long-term trend was probably reversing and the Australian Dollar might be set for a climb to sunnier slopes.