Forex world

April 11, 2023

AUD/USD looks to regain 0.6700

- AUD/USD bounces off three-week low amid upbeat catalysts surrounding Australia, grinds higher around intraday top of late.

- Australia Westpac Consumer Confidence, NAB sentiment figures join deal with China over barley exports to propel Aussie prices.

- Cautious optimism, reassessment of latest hawkish Fed bets challenge US Dollar bulls amid full markets.

- Risk catalysts eyed for fresh impulse ahead of top-tier US, Australia catalysts.

AUD/USD bulls are back in motion, after a week-long absence, as upbeat Aussie catalysts surrounding foreign trade and sentiment underpin the quote’s latest recovery from a three-week low to 0.6670 heading into Tuesday’s European session. Not only the price-positive factors surrounding Australia but the overall improvement in the risk appetite also favors the quote’s latest rebound.

That said, Australia’s Westpac Consumer Confidence for April rallied to the highest levels since June 2022, printing 9.4% figure versus 0.8% expected and 0.0% prior. Further, the National Australia Bank’s (NAB) Business Conditions matched the forecast figure of 16.0, versus 17.0 prior, whereas NAB Business Confidence eased to -1.0 versus 0.0% expected and -4.0% previous readings.

On the contrary, China’s headline inflation numbers for March, namely the Consumer Price Index (CPI) and Producer Price Index (PPI), came in 0.7% YoY and -2.5% YoY versus 1.0% and -1.4% respective priors.

Apart from mostly upbeat Aussie data, headlines from Reuters suggesting an end of the trade dispute between Australia and China over barley exports also seemed to have favored the AUD/USD prices.

Elsewhere, fresh doubts on the US Federal Reserve’s (Fed) capacity to stay hawkish, backed by downbeat comments from New York Fed John Williams and fears of recession spread by BlackRock, seem to weigh on the US Dollar and allow the AUD/USD to remain firmer.

Amid these plays, the S&P 500 Futures print mild gains around 4,143 at the latest while the US 10-year and two-year Treasury bond yields retreat to 3.40% and 3.97% by the press time.

Moving on, risk catalysts and the return of full markets may entertain AUD/USD pair traders ahead of Wednesday’s key US inflation and Fed Minutes, as well as Thursday’s Aussie jobs report.

Technical analysis

AUD/USD bounces off a two-week-old support line, around 0.6620 at the latest, to aim for the convergence of the 10-DMA and the support-turned-resistance line stretched from March 10, around the 0.6700 round figure.


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