Category: Forex News

AUD to USD Forecast: China Inflation, NPC, and US Data Set Tone

Economists forecast consumer inflation expectations to remain at 3.0% in February.

Softer-than-expected consumer inflation expectations could improve consumer confidence. An improving consumer confidence environment could fuel consumer spending and demand-driven inflation.

However, considering the weaker-than-expected US labor market data, softer inflation may not be enough to drive consumption. Consumers curb spending on non-essential items in a deteriorating labor market environment. Weaker consumer spending trends would support an H1 2024 Fed rate cut.

Short-Term Forecast

Near-term AUD/USD trends will hinge on US inflation figures and economic data from China. Softer US inflation numbers and upbeat economic indicators from China could drive buyer demand for the AUD/USD. A fiscal stimulus package from Beijing would support an AUD/USD return to the $0.67 handle.

AUD/USD Price Action

Daily Chart

The AUD/USD hovered above the 50-day and 200-day EMAs, affirming bullish price signals.

An Aussie dollar breakout from the $0.66500 handle would give the bulls a run at the $0.67286 resistance level.

Updates from the NPC, economic data from China, and US consumer inflation expectations need consideration.

However, a fall through the $0.66162 support level would bring the 200-day and 50-day EMAs into view.

A 14-period Daily RSI reading of 61.85 indicates an AUD/USD move to the $0.67286 resistance level before entering overbought territory.

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