Published on May 5, 2023

Daily Analysis For AUD/USD 05-05-2023

AUD/USD Analysis

Economic Events and Scenario for AUD/USD

Economic Events : -

GMT	Event	Impact	Currency
01:00	(Japan) International Children's Day	None	JPY
01:00	(Netherlands) Liberation Day	None	EUR
02:30	(Australia) Home Loans MoM	Medium	AUD
02:30	(Australia) Investment Lending for Homes	Medium	AUD
02:30	(Australia) RBA Statement on Monetary Policy	Medium	AUD
02:45	(China) Caixin Composite PMI	Low	CNY
02:45	(China) Caixin Services PMI	High	CNY
06:45	(Switzerland) Unemployment Rate	High	CHF
07:00	(Germany) Factory Orders MoM	Medium	EUR
07:30	(Switzerland) Inflation Rate MoM	Low	CHF
07:30	(Switzerland) Inflation Rate YoY	Medium	CHF
07:30	(Switzerland) CPI	High	CHF
07:45	(France) Industrial Production MoM	Medium	EUR
07:45	(France) Private Non Farm Payrolls QoQ	Low	EUR
08:00	(Austria) Wholesale Prices YoY	Low	EUR
08:00	(Austria) Wholesale Prices MoM	Low	EUR
08:00	(Austria) Balance of Trade	Low	EUR
08:00	(Slovakia) Retail Sales YoY	Low	EUR
08:00	(Slovakia) Retail Sales MoM	Low	EUR
08:00	(Spain) Industrial Production YoY	Low	EUR
08:00	(Switzerland) Foreign Exchange Reserves	Low	CHF
08:30	(Euro Area) S&P Global Construction PMI	Low	EUR
08:30	(France) S&P Global Construction PMI	Low	EUR
08:30	(Germany) S&P Global Construction PMI	Medium	EUR
08:30	(Italy) S&P Global Construction PMI	Low	EUR
09:00	(Italy) Retail Sales MoM	High	EUR
09:00	(Italy) Retail Sales YoY	High	EUR
09:30	(Slovenia) Balance of Trade	Low	EUR
09:30	(United Kingdom) S&P Global/CIPS Construction PMI	Medium	GBP
10:00	(France) New Car Registrations YoY	Low	EUR
10:00	(Euro Area) Retail Sales YoY	High	EUR
10:00	(Euro Area) Retail Sales MoM	High	EUR
11:00	(Luxembourg) Inflation Rate YoY	Low	EUR
11:00	(Luxembourg) Inflation Rate MoM	Low	EUR
11:00	(Spain) Consumer Confidence	Medium	EUR
13:30	(Canada) Average Hourly Wages YoY	Low	CAD
13:30	(Canada) Full Time Employment Chg	Medium	CAD
13:30	(Canada) Part Time Employment Chg	Medium	CAD
13:30	(Canada) Participation Rate	Medium	CAD
13:30	(Canada) Employment Change	High	CAD
13:30	(Canada) Unemployment Rate	High	CAD
13:30	(United States) Manufacturing Payrolls	Low	USD
13:30	(United States) Nonfarm Payrolls Private	High	USD
13:30	(United States) Non Farm Payrolls	High	USD
13:30	(United States) Unemployment Rate	High	USD
13:30	(United States) Government Payrolls	Low	USD
13:30	(United States) Participation Rate	Medium	USD
13:30	(United States) Average Weekly Hours	Low	USD
13:30	(United States) Average Hourly Earnings MoM	Medium	USD
13:30	(United States) Average Hourly Earnings YoY	Medium	USD
14:30	(United States) Used Car Prices MoM	Low	USD
14:30	(United States) Used Car Prices YoY	Low	USD
15:00	(Ecuador) Inflation Rate YoY	Low	USD
15:00	(El Salvador) Inflation Rate YoY	Low	USD
15:00	(El Salvador) Inflation Rate MoM	Low	USD
18:00	(United States) Baker Hughes Oil Rig Count	Low	USD
18:00	(United States) Baker Hughes Total Rig Count	Low	USD
20:00	(United States) Consumer Credit Change	Low	USD

Today's Scenario: - The AUD/USD pair experienced a significant uptick above the key resistance level of 0.6700 after the release of the hawkish quarterly Reserve Bank of Australia (RBA) Statement of Monetary Policy (SoMP). The statement outlined that if inflation remains persistent, the RBA will announce more rate hikes, with interest rates expected to fall to 3% by mid-2025. The RBA believes that energy prices will significantly contribute to inflation in the coming year.

This week, the RBA unexpectedly raised its Official Cash Rate (OCR) by 25 basis points (bps) to 3.85%. It appears that RBA Governor Philip Lowe believed that the current monetary policy was not restrictive enough to tame Australian inflation, or that inflation expectations were still solid and required a rise in interest rates to curb future inflation.

Buy Scenario: - The AUD/USD pair has broken a downward-sloping resistance line from mid-February, which now acts as immediate support near 0.6725. The bullish momentum is further supported by a strong MACD signal and a positive RSI (14) line that is not yet overbought. As a result, the pair is expected to continue its upward trend and test the 100-day moving average hurdle at around 0.6790, followed by the April peak of 0.6810. Till we do not advise to buy AUD/USD.

Sell Scenario: - However, a daily close below the immediate support level of 0.6725 could negate the trend line breakout and push the pair towards the convergence of the 50-day and 21-day moving averages, currently around 0.6680-85. Additionally, there is an ascending trend line from the past week, around 0.6655, that could act as another support level before the bears take control of the AUD/USD pair. Till we do not advise to sell AUD/USD.

Support and Resistance Level: -