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Today on the US Economic Calendar, we are keeping a close eye on the latest updates regarding employment costs and consumer confidence. These key economic indicators can have a significant impact on market trends and investor sentiment.
According to economists, employment costs, particularly wages, are expected to rise by 0.9% quarter-on-quarter in Q1 2024. This increase could influence expectations of a potential Fed rate cut in September. Higher wages could also lead to a boost in disposable income and consumer spending, but a more hawkish Fed rate path may result in higher borrowing costs and reduced disposable income.
Meanwhile, the CB Consumer Confidence Index is also a major factor to watch. Forecasts suggest a decline in the index from 104.7 to 104.0 in April. A drop in consumer confidence could signal a slowdown in consumer spending and softer inflation, ultimately impacting market dynamics.
In addition to these economic indicators, the AUD/USD will likely be influenced more by wage data and consumer confidence figures. Keep an eye on other US economic data including the Chicago PMI and house price data.
Short-Term Forecast: What to Watch For
For short-term AUD/USD trends, focus on upcoming Australian retail sales figures, US labor market data, and the FOMC press conference. Positive Australian retail sales could lead to speculation on an RBA rate hike, shifting monetary policy divergence towards the Aussie dollar. Conversely, strong US data may reduce expectations of Fed rate cuts in 2024.
AUD/USD Price Action: Analyzing the Charts
Daily Chart Analysis
Looking at the daily chart, the AUD/USD is currently above the 50-day EMA but below the 200-day EMA. This signals a bullish near-term outlook but a bearish longer-term perspective. A breakout above the 200-day EMA and the $0.65760 resistance level could propel the pair towards the $0.66 handle.
On the flip side, a break below the $0.65500 support level may lead to a drop towards the 50-day EMA and potentially the $0.64582 support level. With the Daily RSI reading at 57.46, there is still room for further upside potential before reaching overbought territory.
Stay informed about Aussie retail sales, Chinese manufacturing PMI data, and updates from the US economic calendar as they could impact the AUD/USD price action in the coming days.
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