AUDUSD on Friday dropped -0.56% to 0.67640. Week ending 2024-08-30 moved lower by -0.35%. End of August rose 3.31%. What happened.

AUDUSD Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.56%	-37.8 Pips
Week 2024-08-30	-0.35%	-23.8 Pips
August	3.31%	217 Pips

Upcoming key events for the new week (London Time)

Mon 06:00 AM Labor Day
Wed 02:30 AM GDP (3-mth)
Thu 01:30 PM Initial Unemployment Insurance Claims
Fri 01:30 PM Nonfarm Payroll Employment

What happened over the week

In the United States, the Michigan Index of Consumer Sentiment for August marginally increased to 67.9 points from 67.8 points in July, as reported by the University of Michigan. The 5-year Consumer Inflation Expectation remained steady at 3%. According to the Bureau of Economic Analysis, the PCE Price Index (1-month) rose to 0.2% in July from 0.1% in June, while the index excluding food and energy stayed constant at 0.2%. U.S. Personal Income increased to 0.3% in July from 0.2% in June, and consumer spending (PCE) climbed to 0.5%, up from 0.3% in June. The annual PCE Price Index remained at 2.5%. The U.S. GDP annual rate in the second quarter’s flash estimate rose to 3% from 2.8% in the first quarter, and the GDP Price Index increased to 2.5% from 2.3%. However, the flash estimate for PCE excluding food and energy prices fell to 2.8% from 2.9%, and the PCE Price (3-month) dropped to 2.5% from 2.6%. The labor market also showed signs of improvement, as initial unemployment insurance claims decreased slightly to 231K for the week ending August 24, down from 232K. Other notable data included a drop in the U.S. House Price Index to -0.1% for June from 0% in May, a decline in durable goods orders excluding transportation to -0.2% in July from a revised 0.4% in June, although overall new durable goods orders increased significantly by 9.9% for July from a revised -6.7% in June.

In Australia, the seasonally adjusted retail trade turnover for July remained flat at 0%, down from 0.5% in June, as reported by the Australian Bureau of Statistics. Additionally, the nation’s private new capital expenditure in Q2 dropped sharply by -2.2%, compared to a 1% increase in Q1. The Monthly CPI Indicator for July also decreased to 3.5% from 3.8% in June, reflecting a cooling inflation rate.

The latest economic data had a mixed effect on the AUDUSD exchange rate. While the U.S. showed signs of solid economic growth, with an increased consumer sentiment index, higher personal income, and robust consumer spending, Australia’s economic indicators painted a less rosy picture. The flat retail trade turnover, significant decline in capital expenditure, and lower inflation in Australia suggest a weakening domestic economy. Consequently, the U.S. dollar strengthened against the Australian dollar, leading to the AUDUSD pair dropping by -0.56% to 0.67640. Furthermore, the upcoming U.S. economic events, including the Labor Day holiday, initial unemployment insurance claims, and crucial nonfarm payroll employment reports, will likely exert additional downward pressure on the AUDUSD if U.S. economic data continues to show strength relative to Australia’s economic performance in the coming week.

From X (Twitter)

“CPI inflation is often impacted by items with volatile price changes like in Automotive fuel, Fruit and vegetables, and Holiday travel," Leigh Merrington, ABS acting head of prices statistics

Visit https://t.co/d0T7vIWPdv pic.twitter.com/3HH6MLIvMt

— Australian Bureau of Statistics (@ABSStats) August 28, 2024

What can we expect from AUDUSD for the new week and what happened on Friday?

AUDUSD on Friday dropped -0.56% to 0.68. Price is above 9-Day EMA while Stochastic is falling. For the week ending 2024-08-30, the pair dropped -0.35% or -23.8 pips lower.

Looking ahead, AUDUSD looks bearish as the pair posted lower in Friday trading session.

For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 0.68 or at least consolidates above Weekly Pivot level of 0.68. On the downside, we are looking at week low 0.68 or 0.67 (WS1) as immediate support level. AUDUSD need to break on either side to indicate a short-term bias. A close below week low of 0.68 would indicate selling pressure.

For the month of August, AUDUSD is up by 3.31% or 217 pips higher.

Weekly key levels to watch out:

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Gross Domestic Product (Second Estimate), Corporate Profits (Preliminary Estimate), Second Quarter 2024 Source: Bureau of Economic Analysis
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Advance U.S. International Trade in Goods Source: Census Bureau
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Minutes of the Board’s discount rate meetings on July 22 and July 31, 2024 Source: Federal Reserve
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