Today's AUD/USD forecast holds a bullish bias, driven by a weakened dollar in anticipation of Jerome Powell's testimony before Congress. This weakness stems from downbeat economic data released by the US, indicating a slowdown in growth. Simultaneously, Australia's economic growth has slowed, reinforcing bets on potential rate cuts.
Key Economic Data
The US released data on Tuesday, revealing weaker growth in its services sector. This data bolstered market sentiment that increasing interest rates were slowing down the economy and that the Fed might start cutting rates in June.
In a similar vein, Australia's GDP growth in Q4 missed expectations, leading to increased speculation about rate cuts. The slower growth and rising inflation prompted the RBA to consider the possibility of cutting rates for the first time in August.
Powell's Testimony
Market participants eagerly anticipate Powell's speech before Congress, hoping to gain insights into the Fed's policy outlook. While Powell is expected to reiterate the Fed's cautious approach, any dovish indications could further weaken the dollar and boost the AUD/USD.
AUD/USD Technical Analysis
Shift in Sentiment to Bullish:
- The price has broken above the 30-period Simple Moving Average (SMA), a bullish sign.
- The Relative Strength Index (RSI) has crossed above the 50 mark and is now in bullish territory.
Confirmation of Trend:
- To confirm the bullish trend, the price must create a higher high above the 0.6530 key resistance level.
- A failure to do so could indicate a potential reversal.
Key Levels to Watch
Support:
- 0.6400
- 0.6350
- 0.6300
Resistance:
- 0.6530
- 0.6600
- 0.6650
Economic Calendar
Today's Key Events:
| Time | Event |
|---|---|
| 8:15 AM ET | US ADP Non-Farm Employment Change |
| 10:00 AM ET | Fed Chair Powell Testifies |
| 11:00 AM ET | JOLTS Job Openings |
Bottom Line Forecast
The AUD/USD pair is positioned for potential upside amid a weakened dollar and dovish expectations from Powell's testimony. However, confirmation of a bullish trend awaits a higher high above the 0.6530 resistance level. Traders should closely monitor key economic data and the outcome of Powell's speech to gauge market sentiment.
** This analysis is not considerable as trading suggestion. Take your risk at your own hand.