• Retail Sales in the United States plunged as Industrial Production decelerated.
  • US Consumer Sentiment improved, but the needle on inflation expectations rose.
  • AUD/USD Price Analysis: Could test 0.6600 with a daily close below 0.6700.

AUD/USD reverses its course after failing to break the 200-day Exponential Moving Average (EMA) at 0.68099m re-treating beneath 0.6700. economic news from the United States (US), alongside a hawkish tone of US Federal Reserve (Fed) officials, were the driving factors of AUD/USD’s price action. The AUD/USD is trading at 0.6698, down 1.26%.

Risk-off impulse, and US consumer’s higher inflation expectations, bolstered the USD

Sentiment remains deteriorated. US Retail Sales in March dropped 1% MoM, disappointing analysts and indicating a sharper contraction than the anticipated 0.4%. Annual data for the month was 2.9%, falling short of the previous month’s 5.9%. Simultaneously, the Fed disclosed that Industrial Production had decreased for the first time in 2023, expanding only 0.4% MoM, trailing behind February’s 0.9% data and lower than the projected 0.2%. A reduction in durable goods caused a decline in production output.

In April, the University of Michigan (UoM) Consumer Sentiment poll indicated a rise in sentiment from 62 to 63.5. However, there was a 1% increase in inflation expectations for one year, climbing from 3.6% to 4.6%.

Following the UoM report, the AUD/USD extended its losses, as shown by US Treasury bond yields pushing higher, while the US Dollar (USD) jumped from new two-week lows of around 100.788, as portrayed by the US Dollar Index (DXY).

On the Australian front, a solid employment report crushing estimates of 20K, at 53K in March, suggests that although the Reserve Bank of Australia (RBA) paused hiking rates, the RBA might resume its campaign as the Unemployment Rate dipped to 3.5% from 3.6%. In the latest meeting, the RBA’s Governor Philipe Lowe said that the pause did not imply that further increases were off the table and commented that the central bank would be data dependent.

AUD/USD Technical Analysis

AUD/USD Daily chart

Given the backdrop, the AUD/USD plummeted sharply after testing the 200-day EMA. Nevertheless, the fall could be capped by the 20-day EMA at 0.6701, a price level sought by buyers, as the last line of defense. A further decline could pave the way toward the April 13 low at 0.6685, followed by the weekly low at 0.6619.

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD recovers toward 1.0650 ahead of US inflation data

EUR/USD recovers toward 1.0650 ahead of US inflation data

EUR/USD has found fresh demand and marches toward 1.0650 in European trading on Wednesday. The pair capitalizes on renewed US Dollar retreat but the further upside appears capped amid Germany's political instability and a cautiou market mood. Traders await US CPI data and Fedspeak for fresh directives. 

EUR/USD News
GBP/USD struggles near 1.2750, awaits US CPI report

GBP/USD struggles near 1.2750, awaits US CPI report

GBP/USD is struggling at around 1.2750 in the European session on Wednesday, unable to find any fresh impetus. Traders turn risk-averse and refrain from placing fresh bets on the pair ahead of the critical US CPI data and speeches from several Fed policymakers. 

GBP/USD News
Gold price holds above $2,600 mark, bulls seem non committed ahead of US CPI

Gold price holds above $2,600 mark, bulls seem non committed ahead of US CPI

Gold price staged a modest recovery from a nearly two-month low touched on Tuesday. Elevated US bond yields and bullish USD cap gains for the non-yielding XAU/USD. Traders now look forward to the key US Consumer Price Index report a fresh impetus. 

Gold News
US CPI data set to confirm inflation ramped up in October as traders pare back Fed rate cut bets

US CPI data set to confirm inflation ramped up in October as traders pare back Fed rate cut bets

As measured by the CPI, inflation in the US is expected to increase at an annual rate of 2.6% in October, a tad higher than the 2.4% growth reported in September. The core annual CPI inflation, excluding volatile food and energy prices, will likely remain at 3.3% in the same period.

Read more
Forex: Trump 2.0 – A high-stakes economic rollercoaster for global markets

Forex: Trump 2.0 – A high-stakes economic rollercoaster for global markets

The "Trump trade" is back in full force, shaking up global markets in the aftermath of the November 5th U.S. election. This resurgence has led to substantial shifts in both currency and bond markets, with the U.S. dollar index (DXY) jumping 2.0% + since election day.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures