The AUDUSD is steadily rising after recovering from a multi-day low the previous day.
The AUDUSD picks up bids to prolong the previous day’s bounce from the annual low, trading modestly bid near 0.6530. As it validates the market’s cautious confidence amid Monday’s vacations on numerous bourses.
Nonetheless, the prospect of averting a disastrous US default has recently put a floor beneath the risk-barometer AUDUSD pair. The pair’s monthly losses have been bolstered by anticipation of seeing strong Aussie inflation statistics from Australia. And confidence about the global economy. the Reserve Bank of Australia’s (RBA) rate rises, given recent stronger Aussie statistics. And the Reserve Bank of New Zealand’s (RBNZ) rate hike.
Market confidence increases as US lawmakers negotiate an agreement to avert a default; yet, concerns about passage fuel optimism.
On Saturday, US President Joe Biden and House Speaker Kevin McCarthy reached an agreement to extend the federal government’s $31.4 trillion debt ceiling until January 2025. However, due to the compromises entailed, several leftists and rightists oppose the deal. To prevent a ‘catastrophic’ default, the debt ceiling agreement must pass the House on Wednesday and the Senate by June 5.
Apart from the optimism around the US debt ceiling, improved China Industrial Profits for April are also supporting the AUDUSD pair’s recovery due to Canberra’s economic links with Beijing. Nonetheless, China’s National Bureau of Statistics. The National Bureau of Statistics (NBS) reported over the weekend that China’s industrial firm profits improved to -18.2% YoY from -19.2% before. It should be noted that the Year-To-Date (YTD) results indicate -20.6% vs -21.4% before.
Nonetheless, ahead of the top-tier US and Australian economic data, substantially better US data and hawkish Fed bets provide a challenge to Aussie pair purchasers.
On Friday, US Durable Goods Orders for April increased from 3.3% in March to 1.1%, vs -1.0% predicted. Furthermore, Nondefense Capital Goods Orders Excluding Aircraft, commonly known as Core Durable Goods Orders, increased by 1.4% vs -0.2% expected and -0.6% before. Furthermore, the Core PCE Price Index for the same month increased by 0.3% MoM, exceeding market expectations and earlier estimates. and 4.6% YoY to 0.4% and 4.7%, respectively.
The US vacation lends impetus to the corrective recovery, but hawkish Fed wagers and positive US data keep Aussie bears optimistic.
Following the statistics, IMF Managing Director Kristalina Georgieva and Federal Reserve Bank of Chicago President Austan Goolsbee look to be hawkish on the Fed. However, Cleveland Fed President Loretta Mester stated that the Personal Consumption Expenditures (PCE) Price Index. Which was issued on Friday, highlighted the poor progress on inflation.
Despite these moves, market sentiment remains somewhat bullish, assisting the AUDUSD to rise. As a result, Wall Street concluded on a bullish note, while S&P500. Futures print minor gains as it welcomes the US debt ceiling resolution. Although holidays in key bourses limit bond market swings.
In the near future, Australia’s Monthly Consumer Price Index and US Nonfarm Payrolls (NFP) may rise. Consider the AUDUSD bulls. Although the main focus will be on the US Congress voting on the debt ceiling resolution.
AUDUSD Technical examination
The AUDUSD is unlikely to rebound unless it crosses the last support level. Which was at 0.6580 at the time of publication.
