Daily Analysis For AUD/USD  15-06-2023

Daily Analysis For AUD/USD 15-06-2023

AUD/USD Analysis


Key Points: -


·       The Australian Dollar/US Dollar (AUD/USD) pair experienced an increase in demand around the 0.6800 level, as the strong labor market conditions in Australia provide support for potential interest rate hikes by the Reserve Bank of Australia (RBA).


·       During the European trading session, there have been significant losses in the S&P500 futures market due to the cautious sentiment triggered by the Federal Reserve's hawkish dot plot, indicating a more aggressive stance on monetary policy.



·       The commerce ministry of China has made remarks suggesting that efforts are being made to resolve the ongoing disputes with Australia.


Today's Scenario: -


The AUD/USD pair has rebounded from the support level of 0.6800 during the European session, indicating a recovery. The Australian currency is gaining attention as the US Dollar Index (DXY) faces selling pressure around 103.40.


In Europe, there have been notable losses in S&P500 futures due to a hawkish dot plot released by the Federal Reserve (Fed), which has raised caution among investors. The Fed's indication of a potentially more aggressive monetary policy approach has failed to inspire optimism as uncertainty lingers.


Fed Chair Jerome Powell refrained from declaring victory over inflation, acknowledging the persistence of core inflation caused by tight labor market conditions and strong consumer demand. Alongside the dot plot announcement, Powell confirmed two additional interest rate hikes for this year and emphasized that rate cuts are not appropriate.


The US Dollar Index (DXY) has fallen below 103.20 as risk-sensitive currencies gain favor. Market participants will closely monitor the release of US monthly Retail Sales data (May) later today, which is expected to show a contraction of 0.1% compared to the 0.4% expansion recorded in April.


Positive Employment data in Australia has strengthened the case for further interest rate hikes by the Reserve Bank of Australia (RBA). In May, the Australian economy added an impressive 75.9K jobs, surpassing the consensus estimate of 15K. The previous month saw a reduction of 4.3K jobs. The Unemployment Rate also declined to 3.6%, surpassing expectations and the previous reading of 3.7%.


Regarding Australia's relationship with China, the commerce ministry of China has expressed a willingness to resolve disputes between the two nations. The focus now shifts to fostering long-term development in Australian-Chinese relations, aiming to find common ground while respecting differences. It is important to note that China is Australia's largest trading partner, and improved relations would have a positive impact on the Australian Dollar.


Diagram of AUD/USD: -


Economic Events: -


Date      Event                                                                                            Impact        Currency

0:00      (United States) Fed Press Conference                                              High  USD

4:15      (New Zealand) GDP Growth Rate YoY                                         Medium NZD

4:15      (New Zealand) GDP Growth Rate QoQ                                       Medium NZD

5:20      (Japan) Foreign Bond Investment                                       Low  JPY

5:20      (Japan) Stock Investment by Foreigners                                           Low  JPY

5:20      (Japan) Machinery Orders YoY                                                   Medium   JPY

5:20      (Japan) Machinery Orders MoM                                               Medium   JPY

5:20      (Japan) Imports YoY                                                                           Low     JPY

5:20      (Japan) Balance of Trade                                                    High    JPY

5:20      (Japan) Exports YoY                                                                    Medium     JPY

5:30      (Euro Area) Eurogroup Meeting                                                Medium   EUR

7:00      (Australia) Consumer Inflation Expectations                      Low AUD

7:00      (Australia) Part Time Employment Chg                                      Medium AUD

7:00      (Australia) Participation Rate                                                             Low   AUD

7:00      (Australia) Full Time Employment Chg                                       Medium AUD

7:00      (Australia) Unemployment Rate                                                       High   AUD

7:00      (Australia) Employment Change                                                       High   AUD

7:00      (Australia) RBA Bulletin                                                              Medium    AUD

7:00      (China) PBoC 1-Year MLF Announcement                         Low CNY

7:00      (China) House Price Index YoY                                                     Medium  CNY

7:30      (China) Unemployment Rate                                                            High   CNY

7:30      (China) Retail Sales YoY                                                                      High    CNY

7:30      (China) Industrial Production YoY                                       High CNY

7:30      (China) Fixed Asset Investment (YTD) YoY                   Medium CNY

9:05      (Japan) 3-Month Bill Auction                                                              Low  JPY

10:00    (Japan) Tertiary Industry Index MoM                                                  Low JPY

10:00    (Netherlands) Unemployment Rate                                Medium EUR

10:30    (Finland) GDP YoY                                                                                 Low   EUR

12:00    (Switzerland) Producer & Import Prices MoM                                  Low CHF

12:00    (Switzerland) Producer & Import Prices YoY                       Low CHF

12:15    (France) Inflation Rate MoM                                                      Medium   EUR

12:15    (France) Inflation Rate YoY                                                         Medium   EUR

12:15    (France) Harmonised Inflation Rate MoM                         Low EUR

12:15    (France) Harmonised Inflation Rate YoY                                           Low  EUR

13:30    (Spain) Balance of Trade                                                             Medium    EUR

14:10    (Spain) Obligacion Auction                                                    Low   EUR

14:10    (Spain) Bonos Auction                                                                        Low    EUR

14:30    (Euro Area) Balance of Trade                                                      Medium  EUR

14:30    (France) 5-Year OAT Auction                                                               Low  EUR

14:30    (France) 3-Year OAT Auction                                                               Low  EUR

14:30    (Greece) Construction Output YoY                                      Low EUR

14:30    (Montenegro) Inflation Rate YoY                                                       Low   EUR

14:30    (Montenegro) Harmonised Inflation Rate YoY                                  Low EUR

14:30    (Montenegro) Inflation Rate MoM                                     Low  EUR

15:00    (Belgium) Construction Output YoY                                     Low  EUR

15:30    (France) 10-Year Index-Linked OAT Auction                       Low EUR

15:30    (Ireland) Balance of Trade                                                    Low   EUR

16:00    (Portugal) Economic Activity YoY                                                      Low   EUR

16:00    (Portugal) Private Consumption YoY                                                  Low EUR

17:45    (Canada) Housing Starts                                                              Medium   CAD

17:45    (Euro Area) ECB Interest Rate Decision                                            High  EUR

17:45    (Euro Area) Marginal Lending Rate                                     Low  EUR

17:45    (Euro Area) Deposit Facility Rate                                                      High   EUR

18:00    (Canada) Manufacturing Sales MoM                                                Low  CAD

18:00    (United States) Import Prices YoY                                       Low  USD

18:00    (United States) Export Prices YoY                                       Low  USD

18:00    (United States) Import Prices MoM                               Medium USD

18:00    (United States) Export Prices MoM                             Medium  USD

18:00    (United States) NY Empire State Manufacturing Index              Medium USD

18:00    (United States) Retail Sales YoY                                                       High    USD

18:00    (United States) Retail Sales Ex Autos MoM                      High USD

18:00    (United States) Retail Sales MoM                                      High  USD

18:00    (United States) Philly Fed Business Conditions                                Low USD

18:00    (United States) Philly Fed Employment                                            Low  USD

18:00    (United States) Philly Fed CAPEX Index                                             Low  USD

18:00    (United States) Philly Fed Prices Paid                                                Low  USD

18:00    (United States) Philly Fed New Orders                                              Low  USD

18:00    (United States) Philadelphia Fed Manufacturing Index              Medium             USD

18:00    (United States) Jobless Claims 4-week Average                              High USD

18:00    (United States) Continuing Jobless Claims                        High USD

18:00    (United States) Initial Jobless Claims                                                High  USD

18:00    (United States) Retail Sales Ex Gas/Autos MoM                             High USD

18:15    (Euro Area) ECB Press Conference                                     High  EUR

18:30    (Belgium) Balance of Trade                                                                Low    EUR

18:30    (Kosovo) GDP Growth Rate YoY                                                        Low    EUR

18:45    (United States) Capacity Utilization                                     Low  USD

18:45    (United States) Manufacturing Production YoY                               Low USD

18:45    (United States) Industrial Production YoY                  Medium USD

18:45    (United States) Industrial Production MoM               Medium USD

18:45    (United States) Manufacturing Production MoM                            Low USD

19:30    (United States) Business Inventories MoM                Medium USD

19:30    (United States) Retail Inventories Ex Autos MoM                            Low USD

20:00    (United States) EIA Natural Gas Stocks Change                                Low USD

21:00    (United States) 8-Week Bill Auction                                     Low  USD

21:00    (United States) 4-Week Bill Auction                                     Low  USD

21:05    (United Kingdom) BoE Cunliffe Speech                                             Low  GBP

21:30    (Canada) 2-Year Bond Auction                                                          Low    CAD

21:30    (United States) 15-Year Mortgage Rate                                            Low  USD

21:30    (United States) 30-Year Mortgage Rate                                            Low  USD


Buy Scenario: -


Conversely, a recovery in AUD/USD would require weak US data and reduced likelihood of a July rate hike by the Federal Reserve. In such a scenario, the pair may aim for the key resistance line originating from mid-April, which is in proximity to 0.6835.


Subsequently, a potential rally towards the December 2022 peak around 0.6895, followed by the psychological level of 0.6900, cannot be ruled out. Till we do not advise to buy AUD/USD.


Sell Scenario: -


Despite positive employment and inflation data in Australia, as well as disappointing economic figures from China early on Thursday, the AUD/USD pair is struggling to find support. As of now, it remains undecided near 0.6795, testing a short-term support line.


From a technical perspective, there is an upward-sloping trend line since June 5, currently around 0.6785, which is preventing immediate downside for the AUD/USD pair. However, the overbought RSI (14) line suggests possible pullback moves.


Nevertheless, if the mentioned support line is convincingly broken, the AUD/USD pair could be exposed to further declines, targeting the mid-May swing high around 0.6710 before potentially reaching the 200-day Simple Moving Average (SMA) level near 0.6655. Till we do not advise to sell AUD/USD.


Support and Resistance Level: -

 Support              Resistance  

 S1 0.6756   -     R1 0.6836

 S2 0.6716  -      R2 0.6875

 S3 0.6676  -      R3 0.6915


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