Markets
Fundamental analysis of AUD/USD

Fundamental analysis of AUD/USD

25.01.2024 02:55

Intradía

Fundamental

Fundamental Analysis

The performance of the Australian dollar against the US dollar in the current environment reflects the complex interplay between economic indicators and central bank policy.

Major economic announcements, such as those from the Reserve Bank of Australia, are very important for investors, especially news on wage growth, household spending, inflation expectations and the economic outlook. Opinions on what the RBA rate will be in 2024 remain mixed, with a rate cut expected at the end of the third or fourth quarter. The RBA's first report is expected to influence the policy agenda ahead of the inflation report, which will be released on January 31. Inflation eased to 0.8% in the fourth quarter from 1.2% in the previous quarter. A better-than-expected inflation report could increase the likelihood that the Reserve Bank of Australia will raise interest rates on February 6, impacting the strength of the Australian dollar.

The U.S. economy is currently focused on fourth quarter GDP data and the state of the labor market. The US economy is expected to grow by 2% in the fourth quarter after growing by 4.9% in the previous quarter. Key factors such as personal consumption, income and the PCE price index will be important. A decline in these indicators could increase the likelihood that the Federal Reserve will cut interest rates in March. However, the state of the labor market, especially the number of new claims for unemployment benefits, which is expected to rise 200k, will be important to the Fed's decision. Labor market pressures boost wage growth and inflation, affect consumer spending and inflation, and ultimately influence the Fed's interest rate decision. The U.S. Dollar Index (DXY) fell 0.3% to 103.25, even as the S&P Global PMI showed positive U.S. economic data. In particular, the manufacturing purchasing managers' index showed a decline for the first time in four months.

However, AUD/USD declined in Asian trading on the day, approaching 0.65730. Australian economic data also had an impact on AUD/USD: the Australian dollar strengthened due to the decision of the People's Bank of China to lower reserve requirements. Looking ahead, the Australian economic calendar will be relatively quiet, but the US calendar includes four quarters of 2023 GDP data, Personal Consumption Expenditures (PCE), Durable Goods Orders and the first round of unemployment benefits. These data will have a significant impact on the AUD/USD trend, especially US and Australian inflation growth and the Fed and RBA monetary policy decisions.

Technical Analysis and Scenarios:

The current price of 0.65750 is located just below the middle Bollinger Band (0.65880) and just above the lower band (0.65610). This suggests that the pair is in a relatively neutral zone within the current trading range. The Bollinger Bands indicate that the price range is expanding, as evidenced by the horizontal direction of the indicator. This expansion may signal an increase in volatility in the market. The price is rising in the lower range of the indicator, which usually indicates consolidation or preparation for a potential upward movement.