AUDUSD Bullish Long to Short term
Today, I am pleased to provide you with an updated projection for the AUD/USD (Australian dollar to US dollar) currency pair based on recent fundamental economic developments from the United States, Australia, and other related economies. Our analysis aims to help you understand whether the AUD/USD is likely to move higher or lower in the coming weeks and months.
Recent Economic Developments
United States
GDP Growth:
Data: The U.S. GDP grew by 2.9% in Q1 2024, surpassing the expected 2.6%.
Date: April 28, 2024
Source: Bureau of Economic Analysis
Impact: Strong GDP growth underscores economic resilience, potentially supporting a stronger USD, which could exert downward pressure on AUD/USD.
Employment:
Data: Non-farm payrolls increased by 250,000 in April, well above the anticipated 180,000.
Date: May 3, 2024
Source: Bureau of Labor Statistics
Impact: Robust job growth supports economic stability and the USD, possibly leading to a weaker AUD/USD as investors favor higher-yielding USD assets.
Inflation:
Data: The Consumer Price Index (CPI) showed a year-over-year increase of 4.8%, slightly above the forecasted 4.6%.
Date: May 10, 2024
Source: Bureau of Labor Statistics
Impact: Persistent inflation suggests further rate hikes by the Federal Reserve, which could strengthen the USD and negatively impact AUD/USD.
Consumer Confidence:
Data: The University of Michigan's consumer sentiment index fell to 58.4, below the forecast of 60.
Date: May 17, 2024
Source: University of Michigan
Impact: Declining consumer confidence could signal future economic challenges, potentially moderating the strength of the USD.
Australia
GDP Growth:
Data: Australia’s GDP grew by 1.8% in Q1 2024, slightly below the forecasted 2.0%.
Date: May 25, 2024
Source: Australian Bureau of Statistics
Impact: Slightly lower GDP growth indicates economic challenges, which may weaken the AUD.
Employment:
Data: Employment increased by 30,000 jobs in April, matching expectations.
Date: May 18, 2024
Source: Australian Bureau of Statistics
Impact: Steady employment growth supports economic stability, potentially providing some support for the AUD.
Inflation:
Data: The Consumer Price Index (CPI) showed a year-over-year increase of 6.1%, above the expected 5.8%.
Date: May 10, 2024
Source: Australian Bureau of Statistics
Impact: Higher than expected inflation may lead to rate hikes by the Reserve Bank of Australia (RBA), which could support the AUD.
Commodity Prices:
Data: Iron ore prices, a major export for Australia, have increased by 5% in the past month.
Date: May 15, 2024
Source: Trading Economics
Impact: Rising commodity prices generally support the AUD, given Australia’s significant export-driven economy.
Upcoming Data Releases
U.S. Personal Consumption Expenditures (PCE) Price Index:
Date: May 30, 2024
Source: Bureau of Economic Analysis
Impact: Key inflation indicator that could influence future Fed rate decisions, affecting USD strength and consequently AUD/USD.
Australian Retail Sales:
Date: June 2, 2024
Source: Australian Bureau of Statistics
Impact: Retail sales data will provide insights into consumer spending and economic health, impacting the AUD.
U.S. Federal Reserve Meeting:
Date: June 12-13, 2024
Source: Federal Reserve
Impact: Potential rate changes will significantly impact the USD and, consequently, AUD/USD.
Reserve Bank of Australia (RBA) Meeting:
Date: June 6, 2024
Source: Reserve Bank of Australia
Impact: RBA policy decisions will affect AUD valuation.
Projection for AUD/USD
Short Term (Next 1-3 Months)
Bias: Neutral
Target Levels: 0.6600 - 0.6800
Rationale: The USD's strength, driven by robust U.S. economic data and potential Fed rate hikes, may exert downward pressure on the AUD/USD. However, this could be balanced by Australia's steady economic performance and rising commodity prices. Thus, we expect the AUD/USD to trade within a neutral range.
Long Term (Next 6-12 Months)
Bias: Neutral to Bullish
Target Levels: 0.6800 - 0.7100
Rationale: Over the longer term, Australia’s steady economic performance, supported by rising commodity prices and potential RBA rate hikes, may bolster the AUD. Additionally, any easing of U.S. economic momentum or Fed rate hikes could weaken the USD, supporting a stronger AUD/USD.
Conclusion
Based on our analysis of recent economic data and upcoming releases, we project a neutral outlook for AUD/USD in the short term and a neutral to bullish outlook in the long term. We recommend positioning for potential movements within the target levels outlined above. We will continue to monitor economic developments closely and adjust our outlook as new data becomes available.
Recent Economic Developments
United States
GDP Growth:
Data: The U.S. GDP grew by 2.9% in Q1 2024, surpassing the expected 2.6%.
Date: April 28, 2024
Source: Bureau of Economic Analysis
Impact: Strong GDP growth underscores economic resilience, potentially supporting a stronger USD, which could exert downward pressure on AUD/USD.
Employment:
Data: Non-farm payrolls increased by 250,000 in April, well above the anticipated 180,000.
Date: May 3, 2024
Source: Bureau of Labor Statistics
Impact: Robust job growth supports economic stability and the USD, possibly leading to a weaker AUD/USD as investors favor higher-yielding USD assets.
Inflation:
Data: The Consumer Price Index (CPI) showed a year-over-year increase of 4.8%, slightly above the forecasted 4.6%.
Date: May 10, 2024
Source: Bureau of Labor Statistics
Impact: Persistent inflation suggests further rate hikes by the Federal Reserve, which could strengthen the USD and negatively impact AUD/USD.
Consumer Confidence:
Data: The University of Michigan's consumer sentiment index fell to 58.4, below the forecast of 60.
Date: May 17, 2024
Source: University of Michigan
Impact: Declining consumer confidence could signal future economic challenges, potentially moderating the strength of the USD.
Australia
GDP Growth:
Data: Australia’s GDP grew by 1.8% in Q1 2024, slightly below the forecasted 2.0%.
Date: May 25, 2024
Source: Australian Bureau of Statistics
Impact: Slightly lower GDP growth indicates economic challenges, which may weaken the AUD.
Employment:
Data: Employment increased by 30,000 jobs in April, matching expectations.
Date: May 18, 2024
Source: Australian Bureau of Statistics
Impact: Steady employment growth supports economic stability, potentially providing some support for the AUD.
Inflation:
Data: The Consumer Price Index (CPI) showed a year-over-year increase of 6.1%, above the expected 5.8%.
Date: May 10, 2024
Source: Australian Bureau of Statistics
Impact: Higher than expected inflation may lead to rate hikes by the Reserve Bank of Australia (RBA), which could support the AUD.
Commodity Prices:
Data: Iron ore prices, a major export for Australia, have increased by 5% in the past month.
Date: May 15, 2024
Source: Trading Economics
Impact: Rising commodity prices generally support the AUD, given Australia’s significant export-driven economy.
Upcoming Data Releases
U.S. Personal Consumption Expenditures (PCE) Price Index:
Date: May 30, 2024
Source: Bureau of Economic Analysis
Impact: Key inflation indicator that could influence future Fed rate decisions, affecting USD strength and consequently AUD/USD.
Australian Retail Sales:
Date: June 2, 2024
Source: Australian Bureau of Statistics
Impact: Retail sales data will provide insights into consumer spending and economic health, impacting the AUD.
U.S. Federal Reserve Meeting:
Date: June 12-13, 2024
Source: Federal Reserve
Impact: Potential rate changes will significantly impact the USD and, consequently, AUD/USD.
Reserve Bank of Australia (RBA) Meeting:
Date: June 6, 2024
Source: Reserve Bank of Australia
Impact: RBA policy decisions will affect AUD valuation.
Projection for AUD/USD
Short Term (Next 1-3 Months)
Bias: Neutral
Target Levels: 0.6600 - 0.6800
Rationale: The USD's strength, driven by robust U.S. economic data and potential Fed rate hikes, may exert downward pressure on the AUD/USD. However, this could be balanced by Australia's steady economic performance and rising commodity prices. Thus, we expect the AUD/USD to trade within a neutral range.
Long Term (Next 6-12 Months)
Bias: Neutral to Bullish
Target Levels: 0.6800 - 0.7100
Rationale: Over the longer term, Australia’s steady economic performance, supported by rising commodity prices and potential RBA rate hikes, may bolster the AUD. Additionally, any easing of U.S. economic momentum or Fed rate hikes could weaken the USD, supporting a stronger AUD/USD.
Conclusion
Based on our analysis of recent economic data and upcoming releases, we project a neutral outlook for AUD/USD in the short term and a neutral to bullish outlook in the long term. We recommend positioning for potential movements within the target levels outlined above. We will continue to monitor economic developments closely and adjust our outlook as new data becomes available.
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