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Category: Forex News

AUD to USD Forecast: Impacts of Australian Profits and Building Approvals

Beyond the numbers, China remains a focal point. The National People’s Congress begins on Tuesday.

US Economic Calendar: Fed Speakers in the Spotlight

On Monday, investors must monitor FOMC member speeches throughout the session. FOMC member Patrick Harker is on the calendar to speak.

Reactions to the recent inflation numbers and consumer sentiment report warrant investor attention. Softer Core PCE Price Index and consumer sentiment numbers supported bets on a June Fed rate hike.

However, FOMC members remain concerned about inflation and need confidence inflation will sustainably fall toward the target. Hawkish comments about inflation and the timeline for rate cuts could move the dial.

In February, Harker said interest rates would decrease in 2024. Harker also cautioned against expecting rate cuts around the corner. He needed a couple of meetings to be confident about inflation trends, signaling a May/June rate cut.

Short-Term Forecast

Near-term AUD/USD trends will hinge on US services PMI numbers, the US Jobs Report, and Fed Chair Powell. A pickup in US service sector activity and a tighter US labor market could impact investor bets on a June Fed rate cut. A hotter-than-expected US Jobs Report may also tilt monetary policy divergence toward the US dollar.

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AUD/USD Price Action

Daily Chart

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

An Aussie dollar breakout from the $0.65500 handle would support a move to the 50-day EMA. A break above the 50-day EMA would bring the 200-day EMA and the $0.66162 resistance level into view.

Australian corporate profits, building approvals, Fed chatter, and China need consideration.

However, a break below the $0.64900 support level could signal a drop to the $0.63853 support level.

A 14-period Daily RSI reading of 45.68 suggests an AUD/USD fall to the trend line before entering oversold territory.

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