- The AUD/USD is trading near the 0.6270 area, and failed to recover in the continuous power of the US dollar.
- The Australian labor market report continues to be a safe demand for the US dollar to influence the Australian.
- Technical indicators indicate the downside where the pair remains less than the main moving averages.
The AUD/USD pair remained depressed during the American session below the 0.6300 barrier as a strongest US dollar (USD) and disappointing employment data from Australia. Technical signals have turned to an increasing decline, as indicators deteriorate and price procedures reduce important average movement.
Daily Digest Market Movers: The Australian dollar is abandoned
- The Australian dollar (AUD) extended losses in the second session on Friday, and was pressed by both external and local drivers.
- The issuance of a disappointing report for Australia, which showed that the economy threw 52.8 km in February, is much lower than expectations to increase 30,000, raised new concerns about the weak labor market.
- The US dollar based on its recovery in the middle of the week, driven by expectations that the Federal Reserve (Fed) will keep interest rates high for a longer period, after high inflation expectations in the latest summary of economic expectations.
- Although the Federal Reserve kept the policy rate unchanged, the updated tone tends to more hawks, providing the elevator to Greenback.
- Geopolitical tensions and constant uncertainty also added to the American commercial policy to safe deception flows, which benefits from the US dollar.
- US President Donald Trump’s comments about possible new customs tariffs and reprisal trade measures have cautioned investors, a factor that particularly affects sensitive currencies of risks such as Australian, given the Australian exposure to Chinese trade.
- From the perspective of local monetary policy, weak recruitment data increases the possibility of increased mitigation of the Australian Reserve Bank (RBA). RBA has already reduced price rates by 25 basis points in February, and analysts can now recite up to 75 basis points of additional mitigation if economic data continues in disappointment.
Aud/USD technical analysis: The negative momentum deepened with the violated key levels
The AUD/USD pair continued to decrease during the American Friday session, as she homes near the support zone 0.6270, with a declining pressure on the day. The couple remains less firmly less than simple moving averages for 20 days and 100 days, which confirms a deteriorating technical structure.
The MACD MACD is a new red strip, while the RSI index (RSI) decreased sharply to 44, and remained within the negative lands. Both signs indicate that the momentum is continuing in favor of the negative side.
In terms of main levels, immediate support is seen about 0.6250, and the rest below can lead to an additional decrease of about 0.6200. On the upper side, the resistance is located near 0.6310, followed by a more important barrier at 0.6340, where the husband may face the pressure pressure. \
Questions and answers in Australian dollars
One of the most important factors for the Australian dollar (AUD) is the level of interest rates set by the Australian Reserve Bank (RBA). Since Australia is a resource -rich country, the other main engine is the largest export price, iron ore. The health of the Chinese economy, the largest commercial partner, is a factor, as well as inflation in Australia, the rate of growth and commercial balance. Market morale-whether investors are eating more risky assets (risk) or searching for safe materials (risk)-is also a worker, with positive risks for AUD.
The Australian Reserve Bank (RBA) affects the Australian dollar (AUD) by determining the level of interest rates that Australian banks can persuade each other. This affects the level of interest rates in the economy as a whole. The main goal of RBA is to maintain a stable inflation rate of 2-3 % by setting interest rates up or down. Relatively high interest rates are supported compared to other main central banks, and relatively low vice versa. RBA can also use and tighten quantitative dilution to influence credit conditions, with previous AUD negative and positive to AUD.
China is the largest commercial partner in Australia, so the health of the Chinese economy is a major impact on the value of the Australian dollar (AUD). When the Chinese economy does a good job, it buys more raw materials, commodities and services from Australia, raising the demand for AUD, and raising its value. The opposite is the case when the Chinese economy does not grow at the speed available. Positive or negative surprises in Chinese growth data, therefore, they often have a direct impact on the Australian dollar and its wives.
Iron Ore is the largest export in Australia, as it represents 118 billion dollars annually according to data from 2021, with China as its main destination. Therefore, the price of iron ore can be an engine for the Australian dollar. In general, if the price of iron ore rises, the AUD also rises, as the total demand for the currency increases. The opposite is the case if the price of iron ore decreases. Iron ore prices also tend to increase the possibility of a positive commercial balance for Australia, which is also positive for AUD.
The commercial balance, which is the difference between what a country gains from its exports in exchange for what it pays to its imports is another factor that can affect the value of the Australian dollar. If Australia produces very required after exports, its currency will obtain a value of the excess demand created from foreign buyers who seek to buy its exports in exchange for what it spends to buy imports. Therefore, the positive net trade balance enhances AUD, with the opposite effect if the trade balance is negative.
