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AUD/USD is flirting with a short-term support zone ahead of Australia’s retail sales report!
Can the Aussie see enough bullish pressure to revisit higher areas of interest after a technical support bounce?
Before moving on, ICYMI, yesterday’s watchlist looked at USD/JPY’s triangle consolidation ahead of the U.S. core durable goods orders. Make sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. Durable Goods Orders for February: 1.4% m/m (0.7% m/m forecast; -6.9% m/m previous); Core orders came in at 2.2% m/m (2.4% m/m forecast; -7.9% m/m previous)
FHFA Housing Price Index for January: -0.1% m/m (0.1% m/m forecast/previous); up 6.3% y/y vs. 6.7% forecast/previous
Richmond Fed Manufacturing Index for March: -11 (-4 forecast; -5 previous); Employment subindex fell to 0 from 7
CB U.S. Consumer Confidence for March: 104.7 (106.5 forecast; 104.8 previous)
Australia’s Westpac-Melbourne Institute Leading Index, which measures economic activity relative to trend three to nine months into the future, grew by 0.1% in February after a 0.1% dip in January
Australia’s CPI remained unchanged at 3.4% y/y for a third consecutive month in February (vs. 3.5% forecast) as cheaper meat and seafood helped offset increases in rent and fuel prices
China’s industrial profits jumped 10.2% in January and February from the same period last year, following a 2.3% decline in 2023
Spain’s flash CPI accelerated from 2.8% y/y to 3.2% y/y (vs. 3.1% y/y forecast) in February
Price Action News
Overlay of AUD vs. Major Currencies Chart by TradingView
While the Swiss franc continued to see bearish pressure during the Asian and early European session trading, the Australian dollar also saw increased volatility in the last few hours.
And why not? Australia’s annual CPI came in at 3.4% y/y in February, which was a bit weaker than market estimates. Turned out, the economic impact of sold-out Taylor Swift shows in Sydney and Melbourne were offset by weaker tourism elsewhere as the peak travel season winds down.
AUD dropped across the board at the news but also erased most of its losses in the next few hours. It might have helped that China’s industrial profits registered at 25-month highs in the first two months of 2024. Sellers eventually came back at the start of the European session and AUD is currently trading near its intraweek lows.
Upcoming Potential Catalysts on the Economic Calendar:
Switzerland’s Credit Suisse economic expectations at 9:00 am GMT
BOE FPC meeting minutes at 10:30 am GMT
China’s CB leading index at 1:00 pm GMT
U.S. crude oil inventories at 2:30 pm GMT
FOMC voting member Christopher Waller to give a speech at 10:00 pm GMT
BOJ’s Opinions Summary at 11:00 pm GMT
Australia’s MI inflation expectations at 12:00 am GMT (Mar 28)
NZ ANZ business confidence at 12:00 am GMT (Mar 28)
Australia’s retail sales at 12:30 am GMT (Mar 28)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ️
AUD/USD 15-min Forex Chart by TradingView
Comdoll traders huddle up! AUD/USD is trading a few pips away from the S2 (.6510) Pivot Point support which happens to line up with support levels from a few days ago.
Voting FOMC member Christopher Waller will talk monetary policy later today while Australia will print its February retail sales numbers.
Market themes that support risk-taking could push AUD/USD to previous areas of interest like .6530 or .6550 while risk aversion plays may drag AUD/USD to a possible downside breakout and new March lows.
What do you think? Will the support zone hold for another day or two?
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