Aud/USD declines due to mixed economic signals from the US and Australia

AUDUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	-0.55%	-37.8 Pips
Week to-date	-1.06%	-73.5 Pips
October	-1.02%	-70.5 Pips

Upcoming key events (London Time)

Fri 01:30 PM USD Nonfarm Payroll Employment

What happened lately

In the United States, recent economic releases showed a mixed performance. New orders for manufactured goods in August witnessed a slight decrease of 0.2%, following a significantly higher revised growth of 4.9% in July, as reported by the Census Bureau. This indicates a potential cooling in manufacturing demand which could be a concern for the broader economic outlook. Additionally, initial unemployment insurance claims increased to 225,000 for the week ending September 28, up from a previous 219,000, as noted by the Department of Labor. The rise in unemployment claims might suggest softening in the labor market, which could cause concerns regarding economic stability and potential impacts on monetary policy decisions.

In Australia, the economic data depicts a resilient trade balance with the Australian Bureau of Statistics reporting an increase in the International Trade of Goods to 5,644 million AUD in August, holding steady from a revised prior figure of 5,636 million AUD. However, imports and exports of goods in August display divergent trends. Imports increased but remained in negative territory at -0.2%, which is an improvement from the revised -0.6%. On the export side, there was a downturn to -0.2% from a previous positive revised figure of 0.3%. This contraction in exports despite a relatively stable trade balance might indicate potential challenges in global demand for Australian goods.

Against this backdrop, the AUD/USD saw a decline of 0.55%, settling at 0.68450 last Thursday. The interplay of these economic indicators suggests a short-term bearish sentiment for the AUD/USD. The decreasing U.S. manufacturing orders might alleviate some pressure on the Federal Reserve to maintain an aggressive stance on interest rate hikes, potentially weighing on the USD. However, the uptick in jobless claims could also hint at economic concerns, which can contribute to risk-averse behavior among investors. On the Australian side, while the trade surplus remains stable, the downward trajectory in exports could weigh on Australia’s economic outlook. This mixed data keeps the AUD/USD under pressure, fostering a cautious outlook ahead of major U.S. economic events like the upcoming Nonfarm Payroll Employment report. The employment data could further influence market sentiment depending on the findings, possibly leading to more fluctuations in the currency pair.

Latest from X (Twitter)

Tweets by Australian Bureau of Statistics

What can we expect from AUDUSD today?

AUDUSD on Thursday dropped -0.55% to 0.68450. Price is below 9-Day EMA while Stochastic is falling.

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

Looking ahead for the day, immediate support level is at S1 0.68203 with break below could see further selling pressure towards S2 at 0.67957. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.68882 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.68296 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:

#AUDUSD Trending on Twitter

[custom-twitter-feeds hashtag=”#AUDUSD” num=3 showheader=false]