The AUDUSD currency pair has shown resilience, with the Australian dollar appreciating against the US dollar for the second consecutive day. Despite disappointing employment data from Australia, the AUDUSD pair climbed to $0.64493, a positive move attributed to the supportive performance of iron ore and coal prices, boosting the commodity-centric Australian dollar.
However, the uptick in the unemployment rate to 3.8% in March from 3.7% in February weighed on market sentiment, with expectations of interest rate cuts still lingering. The US dollar’s decline, influenced by subdued US Treasury yields and renewed risk-on sentiment, further supported the AUD’s upward momentum.
Meanwhile, US President Joe Biden’s call to triple tariffs on Chinese steel and aluminium added another layer of complexity to the market dynamics, potentially impacting the direction of the US dollar.
Technical Analysis
The 4-hour shows that the AUDUSD is currently trading at 0.64493, attempting to build on two consecutive days of gains. The price action sits above the 20-SMA (green line) but remains below the 50-SMA (blue line) and 100-SMA (orange line). This suggests a potential short-term uptrend, although lacking confirmation from the higher moving averages.
The RSI (47.64) sits in neutral territory, hovering below the 50.00 level. This indicates a lack of strong directional bias, but a potential upside move could be on the cards if bulls can sustain momentum. Initial resistance sits at 0.64932. A sustained break above this level, with significant volume, could open the door towards 0.65528. Conversely, a failure to hold above the current level could see a retracement towards the 0.63893 support zone. A decisive break below this level would bring the major support at 0.63399 into play.
Summary
The AUDUSD pair continues to navigate through mixed economic signals. While the Australian dollar benefits from commodity price support and a weaker US dollar, concerns over Australia’s labour market and potential rate cuts linger. Traders should monitor key resistance levels at 0.64932 and 0.65528 and support levels at 0.63893 and 0.63399 for potential trading opportunities. Geopolitical developments, particularly US-China trade relations and upcoming economic data releases, will likely influence the AUDUSD pair’s trajectory in the near term.
Sources: TradingView, Trading Economics, MT Newswire, Reuters.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
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