AUDUSD drops 0.44% amid mixed economic data from Australia and strong US labor market

AUDUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	-0.44%	-30.4 Pips
Week to-date	-0.53%	-36.6 Pips
October	-0.46%	-32.1 Pips

Upcoming key events (London Time)

Thu 01:30 AM AUD International Trade in Goods (1-mth)

What happened lately

In Australia, the AiG Industry Index showed signs of improvement in August, climbing to -18.6 points from -23.5 points in July, which indicates a slower rate of contraction in the country’s industrial sector. Despite this positive sign, Australia’s Building Dwelling Approvals experienced a significant decline in August, plummeting to -6.1% from a previous 10.4% in July, as reported by the Australian Bureau of Statistics. On a brighter note, seasonally adjusted retail trade turnover in Australia saw an increase in August, rising to 0.7% from 0% in July, suggesting a moderate recovery in consumer spending during the month.

In the United States, the Job Openings and Labor Turnover Survey (JOLTS) for August reported an increase to 8.04 million job openings, up from a revised 7.711 million in July, according to the Bureau of Labor Statistics. This surge in job openings indicates a robust demand for labor in the U.S. economy. Additionally, the Chicago Purchasing Managers’ Index (PMI) rose slightly to 46.6 points in September from 46.1 points in August, suggesting minor improvement but still indicating contraction in the region’s manufacturing sector.

The recent economic data release likely contributed to the AUDUSD’s 0.44% drop to 0.68814 on Tuesday. The mixed economic indicators from Australia, with improvements in industry and retail trade but a sharp decline in building approvals, reflect an uneven economic landscape, potentially dampening investor sentiment towards the Australian Dollar (AUD). Conversely, strong U.S. job openings data highlights the continued strength of the U.S. labor market, boosting confidence in the U.S. Dollar (USD). The net effect is a stronger USD against the AUD, thus contributing to the decline in the AUDUSD exchange rate. Additionally, upcoming high-impact events, such as Australia’s International Trade in Goods data, could further influence market dynamics and trading sentiment if significant deviations from expectations occur.

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What can we expect from AUDUSD today?

AUDUSD on Tuesday dropped -0.44% to 0.68814. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for AUDUSD looks bearish as the pair posted lower in Tuesday trading session.

Looking ahead for the day, immediate support level is at S1 0.68468 with break below could see further selling pressure towards S2 at 0.68121. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.69345 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.68560 would indicate selling pressure.

For the week to-date, take note that AUDUSD is mixed as compared to the prior week.

Key levels to watch out:

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