AUD USD Forex Analysis - Baxia Markets

AUDUSD +0.44%

The USD lost strength during the week's final session after the release of fundamental economic indicators from the US suggested that the labor market could start to decline in short to medium term.

The US released Non-Farm Payrolls earlier in the session. While the result came out better than expected with 315K of the 300K expert consensus, the USD lost value as an economic deceleration is likely to begin towards the end of this month once the Fed hikes the interest rate.

The US also released the Unemployment rate; the figure came out slightly higher than expected at 3.7%, analysts anticipated 3.5%. The US dollar could bounce back in the upcoming sessions with the release of more economic indicators.

Australia will release S&P Global Services PMI during the new trading session; experts' consensus is 49.6, which indicates an economic contraction in the sector. A lower figure will likely drive the AUDUSD exchange rate down. In contrast, a better-than-expected number will strengthen the Aussie dollar.

AU is also scheduled to release Retail Sales during the following session; expert consensus is at 1.3%, showing an increase in Australia's economic activity. If the figure comes out higher, the AUD could make some good gains over the USD.

On Monday, the Reserve Bank of Australia will release an interest rate decision; a 50 basis point hike is expected by analysts, although some experts believe that it could hike up to 75 basis points to cool off inflationary pressures.

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AUDUSD +1.42%

The USD weakened across all major Forex pairs in the week's last trading session. As market participants digest Fed Chair Powell's hawkish comments (suggesting a bigger interest rate hike at the next FOMC Policy Meeting), many traders have started closing their trading positions to consolidate profits, causing the USD to fall to a more than-a-week low against the AUD.

The next Inflation Rate report on September 13th will have a high impact on the Fed's Interest rate decision; if inflation does not give in, we could see a larger hike, potentially at 100 basis points. On the other hand, if the inflation rate report shows a rate equal to or lower than 8.1%, the hike is expected to be between 50 and 75 bsp.

Australia will release high-impact economic indicators next week. On Monday, the Westpac Consumer Confidence Index is expected to come out at 80.5, a figure lower than the previous month. A higher figure than 80.5 will likely strengthen the AUD, while a lower number will weaken the Aussie against other currencies.

On Wednesday, AU will release the unemployment rate, a very solid economic indicator that gauges the strength of a country's labor market. The figure is expected to stay unchanged from the previous month at 3.4%, a good figure that shows a healthy economy in Australia.

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AUDUSD -2.23%

The Aussie took a big loss to the US Dollar after the release of high-impact economic indicators. The US inflation rate came out at 8.3%, a higher than expected figure by 0.2%. Consumer Price Index also came higher than expected at 296.17; the expert consensus was 295.53.

The USD is strengthening across all major Forex pairs and recovered nearly all the losses it suffered last week. A Higher Consumer Price Index shows that economic activity is still very high in the US, strengthening the USD.

The US stock market is struggling as high inflation suggests that the Federal Reserve will continue to hike interest rates aggressively, threatening the US economic wellness in the short term. Fed Chair Jerome Powell has made it clear that the Federal Reserve will not yield until “compelling evidence” indicates inflation is slowing down.

Australia will release the Unemployment rate during the next trading session; the figure is expected to remain unchanged from the previous month at 3.4%. Simultaneously, the Reserve Bank of Australia will release a bulletin that will give market participants a better picture of where the RBA stands regarding monetary policy. The release of these economic indicators will heavily influence the AUDUSD exchange rate.

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AUDUSD -0.38%

The Aussie continues losing ground to the USD; the pair is on a three-day losing streak, and it reached a level we had not seen since May 2020. AUDUSD is down 6.75% in the last eleven trading sessions; we could see the pair sink lower with the release of a high-impact economic indicator from AU later in the day.

Australia will announce the Retail Sales MoM for August in the early stage of the new trading session; we expect a drop from the previous figure of 1.3% in July; experts anticipate a 0.4% for August. The decline in retail sales suggests that the economic activity in AU is falling, which will hurt the Australian dollar exchange rate against other currencies, particularly the US dollar.

The US dollar continues strengthening across most major forex pairs while the S&P 500 fell to a two-year low as investors fear a global recession. The US economic activity is likely to slow down after the Fed hiked the rates; however, it could take some time before we start seeing a significant reduction in inflationary pressures in the US.

The US released a number of economic indicators earlier in the session with a mix of good and bad results; Durable Goods Orders ex Defense MoM came out at -0.9%, while experts anticipated a 0.3%. New Home Sales MoM shocked us with a 28.8% result when analysts expected a -0.5%. Fed chair Jerome Powell expects this figure to drop significantly in the upcoming months after the Fed hiked interest rates 75 basis points to a total of 3.25%.

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This publication does not provide financial advice for traders, and its only purpose is education. Use all the available information from different analysts and develop your own trading strategy. Trading forex and cryptocurrencies is not for everyone. You should only trade with money you can afford to lose. Past performance does not indicate future results.

AUDUSD + 1.83%

The Aussie strengthens against the USD amid the upcoming Reserve Bank Of Australia Interest Rate Decision. The USD lost ground to most major Forex pairs during the session after high-impact economic indicators suggested that the US economy might be slowing down. US manufacturing data showed weak figures, the US Bond Yields dropped, and the Stock market closed with gains. There is still a negative correlation between the US Stock market and the USD exchange rate.

The US ISM Manufacturing PMI for September came out at 50.9, a worse than expected result by 1.3; the consensus was 52.2. This result shows slower growth in the industry; the figure is still above the 50 level, which indicates industry expansion. The US Federal Reserve could ease the hike on the upcoming interest rate decision as we finally see signs of a slowdown in economic growth.

Australia will release important economic indicators later in the day; the Ai Group Manufacturing Index for September is expected to come out at 48.5; the previous figure was 49.3. If the actual result comes out below 50, the market will see it as an indicator of industry contraction, which will be negative for the AUDUSD exchange rate.

AU will also release Buiding Permits MoM and Home Loans MoM; the consensus for these indicators is 5% and -3.5%, respectively, which is better than the previous month's figures, and a better than expected result will be positive for the Aussie.

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AUDUSD On the Move

AUDUSD lost 0.74% in the last trading sessions of the week, and it's on a four-day losing streak; the USD strengthened after the 10-year treasury yield climbed to 3.88%. The pair continues on a downward trend, and the price broke the support level at $0.63633, reaching a new low in over two years.

The Bollinger bands are wide and moving downwards, suggesting that there will be high volatility and that price will continue to fall in the upcoming trading sessions.

The RSI is about to enter the oversold status, which could change the market sentiment; fundamental news will be key to determining if the AUDUSD pair will continue moving downwards in the short term.

Upcoming Events for Monday, Oct 10th, 2022

The United Kingdom will release BRC Retail Sales Monitor YoY; analysts expect the figure to climb from a previous 0.5% to 0.7%; a higher-than-expected result will be bullish for the Pound Sterling.

Australis will release high-impact economic indicators, starting with the Westpac Consumer Confidence Index, which is expected to drop from 84.4 to 82; a lower figure will be seen as a pessimistic result which will be bearish for the AUD.

The Westpac Consumer Confidence Change for October is expected to drop from 3.9% to -2.8%. One hour later, AU will release NAB Business Confidence for September with a consensus of 8. A higher figure will strengthen the AUD.


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This publication does not provide financial advice for traders, and its only purpose is education. Use all the available information from different analysts and develop your own trading strategy. Trading forex and cryptocurrencies is not for everyone. You should only trade with money you can afford to lose. Past performance does not indicate future results.

Get a free crypto trading guide here https://welcome.baxiamarkets.com/offer-0


Get a free crypto trading guide here https://welcome.baxiamarkets.com/offer-0