The AUD fell for an extra consecutive day on Thursday. The AUDUSD duo fell after the announcement of good S&P Global PMI readings from the U.S  on Wed. The positive report may reduce the likelihood of the US Fed cutting interest rates in the month of March. Causing the pair to fall.  Furthermore – based of the CME’s FedWatch tool, investor betting for a Federal Reserve rate decrease in Mar are down to less than 40 percent, An enormous fall from above 80 percent only just over a month earlier.

AUDUSD Highlights

The AUD is losing traction as the US currency dollar strives to make up previous deficits.

Australian inflation is expected to remain over the Reserve Bank’s targeted price range of 2.0 to 3.0 percent.

The Bank of China may lower the Medium-term nature.  Credit Facilities interest rate for the present quarter.

Notwithstanding the positive American PMI statistics, the value of the U.S dollar fell.

The GDP of the United States yearly fourth quarter is estimated to be 2.0 percent, compared to 4.9 percent the previous quarter.

AUDUSD fell amid the announcement of stronger initial (PMI) readings from Australian on Wed. According to the RBAs. The bulletin, throughout the last 6- months, companies have usually expected a reduction in price increase. Alongside the assumption that rates will remain above the banks inflationary objective range of 2.0-to3.0 percent. The Bulletin’s report also warns that weaker demand growth and higher rivalry. Which is projected to lead to another decline in substantial price rise in the period to come.

The China and DXY Factor

According to Chinese finance the press, the PBOC could reduce the Medium-term nature loan facilities rate in the current quarter. The news echoes bank’s Governor’s previous comment, which disclosed that the Bank of China will decrease the Recommended Reserves Ratio (RRR) by 50 bps. Commencing Feb 5th. This RRR decrease forms a component of the PBOC’s attempts to increase cash in the wider economy. Notwithstanding the decline, these levels remain fairly high. The initiative is likely to unleash almost CNY 1 trillion of additional accessible cash onto the China’s economy. Generating additional funding to boost economic operations as well as relieve liquidity constraints.

Considering the negative US bond rates, the DXY is attempting to rebound from its latest deficits. Nevertheless, the U.S dollar is under pressure owing to risk appetite-investor mood.  Prior to the Fed rate announcement on January 31st. Traders will most likely pay attention to the initial American Annualized figures, that is expected to be 2.0 percent in the Q4.  Down from 4.9 percent in the preceding period. These statistics will give a glimpse at the economy as a whole and may impact investor views about the Federal Reserve’s approach.

Technical Analysis

The AUD is trading about 0.6570 mark on today, with immediate obstacles around the psychological mark of 0.6600. Where corresponds to the 23.6 percent retracement of Fibonacci point at 0.6606 area. Backed by a 14 D-EMA around 0.6617. A convincing advance over this barrier level might send the AUDUSD duo to the key hurdle at 0.6650 level. On the negative side, the pair’s price may test its weekly bottom at 0.6551 mark. Which coincides via the key mark at 0.6550. Should this line of support is surpassed, the duo may experience more negative stress, perhaps revisiting the month’s bottom of 0.6524 mark.

Technical Indicators & Signals. (5- Hourly)