Created
: 2023.05.27
2023.05.27 01:49
The AUD/USD continues its downward trend, currently trading at its year-low. However, this decline occurs amidst positive economic developments and hot Core PCE inflation from the US which made the market’s discount a higher likelihood of the Federal Reserve (Fed) hiking in the next meeting in June. On the other hand, the Australian Retail Sales from April data indicated no variation in sales levels compared to the previous period. Hence, the current data reported a stagnation.
In April, the growth of Australian Retail Sales failed to meet expectations, remaining unchanged from March. This lackluster performance reflects the challenges faced by consumers due to the impact of rising interest rates and persistent inflation. With retail turnover falling short of the anticipated 0.2% increase, it indicates a period of stagnation in consumer spending over the past six months. Furthermore, the ongoing rise in the cost of living adds additional strain to consumers' budgets.
Adding to these challenges, the strength of the US Dollar has further contributed to the decline in the AUD/USD currency pair. Core PCE inflation from the US, an important gauge of inflation for the Federal Reserve (Fed), from April came in at 4.7% (YoY) vs the 4.6% expected and from its previous figure of 4.6%.
In that sense, following yesterday’s strong economic data and the hot inflation figures, the CME FedWatch Tool currently indicates a greater likelihood of the Federal Reserve raising interest rates by 0.25% on June 14 giving further support to the US Dollar.
According to the daily chart, the AUD/USD maintains a bearish outlook in the short term, as indicated by the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), both suggesting that sellers are in control while the pair trades below its main moving averages.
In the event of a decline in the Aussie, immediate support levels are identified at the psychological level of 0.6500, followed by the zone around 0.6545 and the 0.6400 level. Conversely, if the AUD/USD manages to climb higher, the next resistance levels to monitor are at the 0.6540 zone, followed by the psychological level of 0.6600 and the 20-day Simple Moving Average at 0.6650.
Created
: 2023.05.27
Last updated
: 2023.05.27
FXStreet
Financial media
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users.Cookie policy