The AUDUSD has begun to correct, but the pace is slowing in Asia.
In Tokyo, the AUDUSD is trading flat at approximately 0.6700, having corrected from the session lows in the US. Prices in the United States are rising, albeit more slowly than predicted.
Bulls stepped in at US session lows, and a steeper correction towards a 50% mean reversion is expected.
The April PPI report grew 0.2% MoM, bringing the annual growth rate to 2.3% YoY. Petrol costs in the United States rose more slowly than projected, but food prices declined. Core prices are currently up 3.4% year on year. ”The data suggests persistent price pressures in core services,” ANZ Bank analysts explained.
In other news, the number of Americans filing new unemployment claims hit a 1-1/2-year high last week, and producer prices rose marginally in April. US Weekly Initial Unemployment Claims increased by 22,000 to 264,000, indicating a poorer labor market than the 245,000 expected.
In Australia, analysts at ANZ Bank indicated that the Western Australian budget, like the federal budget, anticipates a AUD4.2 billion surplus in 2022-23.
”This is AUD 1.8 billion more than was forecast in the Mid-Year Financial Projections Statement, which was released in December 2022. ”The state treasury forecasts a smaller net operating surplus of AUD3.3 billion in 2023-24, AUD1 billion less than in the mid-year update,” the analysts explained, adding that ”the smaller surplus reflects an increase in expenses to provide cost-of-living assistance and additional investment in front-line service delivery in the health, education, and disability services sectors.
AUDUSD Technical Outlook
The AUDUSD has reached support near 0.6690 and is beginning to slow in its decline. As shown above, a correction could be on the cards.
The target areas are in the 0.6720s and then move up to the 0.6750s.A move into resistance could initially imply a downward continuation towards 0.6670.
