Baxia Markets
April 10, 2024

AUDUSD Holds Anticipating CPI and FOMC

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The Australian Dollar (AUD) continues its upward trajectory, reaching a four-week high at 0.6644 against the US Dollar (USD) on Tuesday, bolstered by investor skepticism surrounding potential rate cuts by the Reserve Bank of Australia (RBA) in 2024. The AUDUSD pair seeks to extend its gains for the third consecutive session amid a weakening USD.

Investors are growing increasingly doubtful about the necessity for the RBA to implement rate cuts in 2024, particularly as the Federal Reserve (Fed) signals a more conservative approach to interest rates. The anticipation of the Fed maintaining its higher interest rate stance has contributed to the strengthening of the Australian currency.AUDUSD Holds Anticipating CPI and FOMC

The RBA has hinted at the unlikelihood of further rate hikes, stressing the need for greater confidence in the inflation outlook before considering any rate adjustments. As attention turns to the release of key economic data, including the US Consumer Price Index (CPI) and the Federal Open Market Committee (FOMC) Minutes , the AUD remains in focus.

Amidst these developments, the AUDUSD pair faces a mixed technical outlook. While the Australian Dollar exhibits bullish sentiment, evidenced by its recent highs, there are signs of potential weakness. An engulfing candlestick pattern suggests that 0.6644 may act as a key resistance level, while indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) point to a possible bearish divergence.

To confirm a reversal in sentiment, traders will closely monitor the AUDUSD's ability to break below the recent swing low at 0.6550, which aligns with the lower boundary of the value area indicated by volume indicators. Overall, the AUDUSD remains range-bound as it awaits further cues from the upcoming CPI data and FOMC Minutes.

As uncertainty prevails over central bank policies and economic indicators, the Australian Dollar's performance against the US Dollar will likely continue to hinge on market sentiment and macroeconomic developments. Traders should remain vigilant for potential shifts in momentum and be prepared to adapt their strategies accordingly.

Key Takeaways:

  1. AUD reaches four-week high against USD at 0.6644.
  2. Doubts arise over RBA's need for rate cuts in 2024.
  3. Fed's conservative stance supports AUD's strength.
  4. Technical analysis shows mixed outlook for AUD/USD pair.
  5. Traders await CPI data and FOMC Minutes for further direction.

Key Economic Releases to Watch Today


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CAD, BOC Interest Rate

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