- Australia’s economy slowed in the first quarter as consumer spending fell.
- There is still a low chance that the RBA will cut rates this year.
- US employment data revealed that job vacancies fell.
The AUD/USD price analysis shows mild bullish sentiment as the Aussie edges higher despite poor GDP data in Australia. The currency strengthened against a weak dollar after data in the previous session revealed a drop in US job openings.
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Data from Australia on Wednesday showed the economy slowed in the first quarter as consumer spending fell amid high interest rates. The GDP increased by 0.1%, missing forecasts of 0.2%. Similarly, the annual figure fell from 1.5% to 1.1% growth. However, there is still a low chance that the RBA will cut rates this year. At the same time, the risks of a rate hike have fallen significantly.
Currently, markets are pricing in a 50% likelihood that the Reserve Bank of Australia will cut rates in December. However, they are only fully expecting a cut in May next year.
Meanwhile, after several downbeat economic reports, the dollar remained fragile, which increased Fed rate cut expectations. On Tuesday, employment data revealed that job vacancies fell when economists had forecasted a slight increase. This report followed poor manufacturing PMI figures on Monday and softer-than-expected inflation numbers on Friday last week. The US economy is slowing down due to high interest rates. As a result, investors are more confident the Fed will cut rates in September. More reports coming this week, including service sector business activity and the nonfarm payrolls, will further shape the outlook for Fed rate cuts.
AUD/USD key events today
- US ADP non-farm employment change
- US ISM services PMI
AUD/USD technical price analysis: Bulls hold within consolidation area
On the technical side, the AUD/USD price has entered a period of consolidation after failing to trade above the 0.6700 resistance level. Bears took control when the price later broke below its bullish trendline. However, they could not break below the 0.6600 support, leading to a consolidation. Consequently, the price got stuck between the 0.6600 support and the 0.6700 resistance.
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Within this consolidation area, the price sits above the 30-SMA, showing bulls are in the lead. Moreover, the RSI trades slightly above 50, supporting bullish momentum. Therefore, AUD/USD might soon retest the range resistance.
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- Source: https://www.forexcrunch.com/blog/2024/06/05/aud-usd-price-analysis-surges-despite-lackluster-gdp-figures/
