AUD/USD aims for continued recovery amid RBA meeting anticipation
Recovering from a six-month low, AUD/USD's surge is buoyed by strong economic indicators and pre-FOMC speculations, with crucial RBA decisions and retail data looming.
Ten days ago, the AUD/USD dived below .6400c to its lowest level in over six months. However, after a remarkable five-day winning streak last week, the AUD/USD has started this week on the front foot, looking to extend its rebound above .6600c.
The AUD/USD's stunning recovery last week was partly due to position squaring, as traders locked in profits on long US dollar positions ahead of this week's FOMC meeting and US jobs data.
Also playing a strong hand, firmer than expected Australian CPI and PPI last week, coming hot on the heels of a robust labour force report, has resulted in the Australian interest rate market swinging from pricing in RBA rate cuts this year to a 50% chance of a hike before year-end.
While we aren't entirely on board with the idea of another RBA rate hike, we acknowledge the window for rate cuts in 2024 is closing; and push back our call for a first RBA rate cut from August until November. Additionally, next week's RBA Board Meeting may see the RBA reinstate its tightening bias. In the lead-up to next week's RBA meeting, we will receive retail sales data for March, building and home loan approvals, and private sector credit this week.
What is expected from March's retail sales report
Date: Tuesday, 30 April at 11.30am AEST
The main event on this week's local calendar is Tuesday's retail sales report for March. The market is looking for a rise of 0.3% MoM, unchanged from 0.3% in February. Given the RBA's focus is on inflation, another tepid retail sales number in March is unlikely to undo the market's current pricing of rate RBA rate hikes.
AU retail sales MoM chart
AUD/USD technical analysis
On the weekly chart, the AUD/USD continues to move sideways within a contracting multi-month bearish triangle. Downtrend resistance from the January 2023 .7158 high is currently at .6765ish. Uptrend support from the October 2022 .6170 low is at .6340ish.
AUD/USD weekly chart
AUD/USD daily technical analysis
The AUD/USD started this week looking to extend its rebound towards a thick resistance layer between .6630 and .6670. Should the AUD/USD break above .6670, weekly downtrend resistance at .6765 would come into play.
On the downside, the AUD/USD has initial support from the 200-day moving average at .6525 and below that, a layer of support at .6480ish from swing lows in March and April, reinforced by the February .6442 low.
AUD/USD daily chart
- Source TradingView. The figures stated are as of 29 April 2024. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.