AUDUSD, new yearly highs in consumer confidence optimism. Westpac’s April consumer confidence report reflects households’ upbeat sentiments

AUDUSD Fundamental Review

After the Easter holiday, the Australian dollar rebounded on Tuesday, rising by about 0.50% versus the greenback. Following the positive US employment report from this past week. The markets increased the odds on an elevated Fed terminal rate for 2023, pricing in a 25 basis point increase for the May meeting.

Australian consumer confidence had a significant increase earlier today. Hitting its highest point since June 2022 (see economic schedule below). The report serves as an indicator of household economic health.

AUDUSD pair aided by China and Australia trade deal

Chinese PPI statistics dropped and inflation missed projections, both of which are signs of an epidemic economy that is struggling. To boost the Chinese economy and the demand for its goods and services, further monetary policy relaxation may be in the works.

Considering this, a settlement between Australia and China may lead to the elimination of tariffs on Australian barley. Which were put in place in 2020 at the height of diplomatic tensions helped the AUD. Because the USA is Australia’s main trade partner. Abolition of the nearly 80% tariff threshold might result in more tariff revisions on other commodities including coal, wine, and wood.

As the trading day comes to a close, the US will be highlighted by Fed speakers (Harker and Kashkari). And their reaction to the job market – Inflation interplay as the US CPI data is scheduled to be released tomorrow.

Economic Activity Schedule & Timeline

The rising wedge chart pattern’s breakout typically signals a future price decline. The AUDUSD price has remained erratic on a daily basis. However, this downward movement may be sparked by a death cross that is about to form.

It is most likely going to occur as a result of the upcoming US CPI data. The Australian dollar may be vulnerable due to hawkish Fed bets being pushed by rising inflation figures. When viewed in relation to the market, the (RSI) reading around the 50 level confirms the market’s uncertainty. However, it is certain to favor lateral skew post-CPI.

Technical Levels to Watch

Major resistance levels:

• 200 Day Moving Average
• 0.6700

Major support levels:

• 0.6565
• 0.6500