As it rises from the annual low and breaks a three-day slump, the AUDUSD pair renews its intraday high.
As it recovers from the annual low to 0.6515 heading into Friday’s European session. AUDUSD posts its first daily gain in four days. In doing so, the Aussie pair cheers the US Dollar’s decline. While paying little attention to the gloomy Australian statistics.
In April, Australia’s retail sales growth was only 0.0%, compared to market expectations of 0.2% and 0.4% the month before.
On a different page, China’s FX intervention and the region’s moderately upbeat outlook. Despite Doubts regarding the Reserve Bank of Australia’s (RBA) hawkish actions support. The corrective recovery of the AUDUSD pair as well.
Bulls on the US dollar retreat from a major resistance level amid conflicting fears over the debt ceiling and lackluster Fed negotiations.
Be aware that the US Dollar Index (DXY) declines. from a 2.5-month high to 104.17 by the time of publication. As US policymakers’ failure to reach agreement on the increase of the US debt ceiling contrasted with rumors. That the negotiators still have a $70.0 billion deficit to close in order to reach the long-awaited agreement. It’s challenging. Recently, US House Speaker Kevin McCarthy said that there was no agreement on the debt solution. And that negotiations would go on. However, we’re working and will keep working until we complete this.
Despite positive US data, the Federal Reserve’s (Fed) stunning tone encourages the US Dollar bulls ahead of further important figures.
Nevertheless, the second estimate of the US Annualized Gross Domestic Product (GDP) for the first quarter of 2023 was increased from 1.0% to 1.3%. In addition, the April Chicago Fed National Activity Index increased to 0.07 from -0.37 in March and -0.02 in market expectations.
In a similar vein, the Kansad Fed Manufacturing Activity increased to -2 in May from -21 in prior readings and -11 in analysts’ estimates. It’s important to note that US Pending Home Sales for April grew YoY but fell MoM, while Core Personal Consumption Expenditures increased to 5.0% in the preliminary readings from 4.9% in the previous readings.
As a result of the information, Richmond Fed President Thomas According to Barkin, “Fed is in a test-and-learn situation to determine how slowing demand lowers inflation.” According to Reuters, Boston Federal Reserve President Susan Collins stated on Thursday that the Federal Reserve “may be at or near” the point when it should stop raising interest rates.
In this environment, the Asia-Pacific stocks show slight gains while the US stock futures record minor losses. Additionally, US Treasury bond rates are declining from their multi-day high.
Looking forward, the market’s mood weakens and traders are able to prepare for important data, such as the US durable goods orders for April and the Core Personal Consumption Expenditure (PCE) Price Index for that month, which is known as the Fed’s favorite inflation indicator.
AUDUSD Technical examination
A support line that slopes downhill from a floor is established for the AUDUSD prices in December 2022, around 0.6495 at the latest, amid an oversold RSI (14).
The pair’s rebound, however, is unlikely to occur unless it crosses the low from March, or around 0.6565.
