Current trend

During the Asian session, the AUD/USD pair shows mostly flat trading, testing the level of 0.6510 for a breakdown. Yesterday, the quotes renewed their lows of March 5 against Australian macroeconomic statistics: in February, retail sales volumes decreased from 1.1% to 0.3%, worse than analysts’ forecasts of 0.4%.

The positive dynamics of the American dollar are developing after the publication of final data on the 2023 Q4 gross domestic product (GDP): the figure was 3.4% QoQ, better than the forecast of 3.2% but lower than the previous value of 4.9%. The GDP price index reached 1.7%, higher than the forecast of 1.6% but lower than 3.3% previously. Thus, economic growth is slowing down less significantly than experts expected, and the labor market remains resistant to the US Federal Reserve’s tight monetary policy. Coupled with signs of accelerating inflation in January-February, it raises the risk of delaying the start of interest rate cuts until the second half of the year, as confirmed by comments from the member of the Board of Governors, Christopher Waller, who said that disappointing macroeconomic data was a significant argument in favor of abandoning monetary policy adjustments.

Thus, the American economy feels quite confident that it is supporting the national currency. In turn, the Australian economy is experiencing problems associated with falling retail sales and high inflation at 4.1% YoY, which impedes the growth of the Australian dollar.

Support and resistance

The long-term trend is downwards: this week, the price reached the support level of 0.6489 and reversed upwards. So, the price may test the resistance level of 0.6578 and after a breakout, it may reach 0.6657. In case of a breakdown of 0.6489, the next sale target will be the February low of 0.6447, and then – 0.6353.

The medium-term trend is upward towards zone 2 (0.6747–0.6732). Last week, the asset corrected to the key trend support area of 0.6522–0.6508, where long positions with the first target at 0.6657 became relevant.

Resistance levels: 0.6578, 0.6657.

Support levels: 0.6489, 0.6447, 0.6353.

Trading tips

Long positions may be opened from 0.6489 with the target at 0.6578 and stop loss 0.6460. Implementation time: 9–12 days.

Short positions may be opened below 0.6447 with the target at 0.6353 and stop loss 0.6485.