The Australian Dollar (AUD) initially rose but later retraced gains following weaker-than-expected NBS Purchasing Managers Index (PMI) data from China last Friday. Given Australia's significant trade ties with China, shifts in the Chinese economy can impact the Australian market substantially. However, earlier in the day, the AUD/USD pair had strengthened as the US Dollar (USD) faced pressure from a slowing US economy.
Support for the AUD was also bolstered by a rise in the monthly inflation rate to 3.6%, heightening expectations of potential interest rate hikes by the Reserve Bank of Australia (RBA). Investors are now anticipating the RBA to maintain elevated rates for an extended period, with no rate cuts expected until next May.
The US Dollar Index (DXY), which measures the USD against six major currencies, saw downward pressure from declining US Treasury yields. This was influenced by a downward revision of the US Gross Domestic Product (GDP) Annualized growth rate to 1.3% from 1.6% for the first quarter. Market focus is shifting to the Federal Reserve's upcoming release of the Core Personal Consumption Expenditures (PCE) Price Index, its preferred inflation gauge, due on Friday.
Technical Analysis: The Australian Dollar remains above the critical level of 0.6600
On Friday, the AUD traded around 0.6630. Analysis of the daily chart indicates a bullish trend for the AUD/USD pair, consolidating within an upward wedge pattern. The 14-day Relative Strength Index (RSI) sits slightly above the 50 mark, supporting the bullish outlook.
Potential upside targets for the AUD/USD include the psychological barrier of 0.6700, followed by the four-month high at 0.6714 and the upper boundary of the rising wedge around 0.6740.
On the downside, immediate support is seen at the psychological level of 0.6600, near the lower edge of the rising wedge. Further support lies at the 50-day Exponential Moving Average (EMA) at 0.6588, with additional downside pressure potentially pushing the AUD/USD pair towards support near 0.6470.
AUD/USD: Daily Chart
Australian Dollar price today
The Australian Dollar's (AUD) percentage move against the main currencies listed today is displayed in the table below. In relation to the Japanese Yen, the Australian dollar was the weakest.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.11% | 0.03% | -0.02% | -0.06% | -0.23% | -0.17% | -0.05% | |
| EUR | -0.07% | -0.06% | -0.10% | -0.13% | -0.30% | -0.24% | -0.13% | |
| GBP | -0.03% | 0.06% | -0.05% | -0.08% | -0.26% | -0.19% | -0.08% | |
| CAD | 0.02% | 0.11% | 0.05% | -0.04% | -0.21% | -0.14% | -0.04% | |
| AUD | 0.06% | 0.13% | 0.08% | 0.04% | -0.17% | -0.10% | 0.00% | |
| JPY | 0.23% | 0.31% | 0.24% | 0.20% | 0.15% | 0.06% | 0.17% | |
| NZD | 0.14% | 0.25% | 0.19% | 0.12% | 0.10% | -0.09% | 0.11% | |
| CHF | 0.06% | 0.14% | 0.09% | 0.04% | 0.00% | -0.17% | -0.10% |
Paraphrasing text from "FX Street" all rights reserved by the original author.
