Policy measures to bolster the Chinese economy could boost demand and improve trade terms with Australia. Significantly, measures to support the Chinese real estate sector could influence iron ore prices and buyer appetite for the Aussie dollar.

US Economic Calendar: Michigan Consumer Sentiment in Focus

On Friday, US consumer sentiment figures for March warrant investor attention. Economists forecast the Michigan Consumer Sentiment Index to remain steady at 76.9. An unexpected rise in the Consumer Sentiment Index could sink bets on an H1 2024 Fed rate cut.

A pickup in consumer sentiment could signal an upward trend in consumer spending, fueling demand-driven inflation. The Fed could delay the timing of an interest rate cut to reduce disposable income and curb consumer spending.

However, investors must also consider the sub-components. Consumer inflation expectations could also move dial.

Other stats include NY Empire State Manufacturing and US industrial production numbers. However, barring a slump in production, the consumer sentiment figures will likely have more influence.

Short-Term Forecast

Near-term AUD/USD trends will hinge on US consumer sentiment and stimulus measures from China. Better-than-expected numbers from the US could impact buyer demand for the AUD/USD. However, policy measures to bolster the Chinese economy could influence the RBA rate path. The RBA left a rate hike on the table in February while the Fed plans to cut interest rates.

AUD/USD Price Action

Daily Chart

The AUD/USD hovered below the 200-day EMA while remaining above the 50-day EMA. The EMAs sent bullish near-term but bearish longer-term price signals.

An Aussie dollar break above the 200-day EMA would support a move toward the $0.67003 resistance level.

Australian inflation expectations, stimulus measures from Beijing, and US consumer sentiment need consideration.

Conversely, an AUD/USD drop below the $0.65760 support level and the 50-day EMA would bring the $0.65500 handle into play. Buying pressure could intensify at the $0.65760 support level. The 50-day EMA is confluent with the support level.

Considering the RSI indicator, a 14-period Daily RSI reading of 52.30 indicates an AUD/USD move to the $0.67003 resistance level before entering overbought territory.

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Deeper Retracement Still Possible

If a deeper retracement begins in gold there are several price zones to keep an eye on for possible support. The first being the prior record high at 2,135, followed by the 38.2% Fibonacci retracement at 2,115 and the 50% retracement at 2,090. The lower price zone is enhanced by the 20-Day MA, currently at 2,088, and the swing high from late December around 2,088. Further down is the 61.8% Fibonacci retracement at 2,065, which is confirmed by the swing high from February 1.

Bullish Continuation Scenario

Alternatively, since gold has been holding relatively strong since last week’s new record high of 2,195, an upside continuation remains a possibility before a deeper correction. A decisive breakout above today’s high of 2,177 would provide a bullish signal, with further confirmation provided on a rally above yesterday’s high of 2,180. This doesn’t mean it will keep rising though. It should be watched carefully for further signs confirming the bullish posture.

Nevertheless, the next higher targets comprise two ranges from Fibonacci extensions of prior swings. The first zone is from 2,235 to 2,246 and the second is from 2,277 to 2,298. The top of the second price zone also completes the initial target for a large rising ABCD pattern. That is where there is symmetry in price between the CD leg and the AB leg of the pattern. Once symmetry occurs the chance for a reversal increases.

Multi-Year Breakout in Play

Since there is only one more trading day left to the week it is likely that gold will end with a high inside week. In other words, the full trading range for the week is near the highs of last week. This shows strong demand remaining for gold. Keep in mind that gold closed at a new record high last week as it rose out of a multi-year basing pattern. That likely sets the stage for a multi-month or multi-year advance.

For a look at all of today’s economic events, check out our economic calendar.

The Solana network is on the verge of reaching a significant milestone, its market capitalization all-time high (ATH) nearing the $80 billion mark. However, this achievement may be overshadowed by an underlying concern that is not garnering much attention: the supply of SOL tokens has inflated from approximately 300 million to 443 million since the last bull market. This increase in supply can have far-reaching implications for the token’s value and investor sentiment.

When a cryptocurrency’s supply increases significantly without a commensurate rise in demand, it can lead to the dilution of the token’s value. For long-term holders of SOL, this inflation of the circulating supply means that their share of the network’s market capitalization has diminished. It is akin to a company issuing more shares; the value of existing shares tends to drop unless the company’s market valuation increases proportionately.

Turning to the Solana price chart, we observe a strong uptrend. The price of SOL has been on a steady climb, consistently finding support at its moving averages, which are well-aligned and sloping upwards, a bullish indicator. Particularly, the 50-day moving average has acted as a support for the price, aiding its upward trajectory.

The recent price candles show an accelerated pace in the appreciation of SOL’s value, hinting at bullish market sentiment. However, the increasing volume bars accompanying the price rise could be a double-edged sword: while it indicates strong buying interest, it also raises concerns about potential overbought conditions, especially as the Relative Strength Index (RSI) is trending toward overbought territory.

As of the latest candle on the chart, SOL is trading just below the $170 mark. While this points to strong short-term momentum, investors should be wary of potential pullbacks, given the RSI levels and the increased supply of tokens on the market. If the market begins to factor in the diluting effects of the inflated supply, the bullish momentum might wane, leading to price corrections.