AUD/USD Price Forecast: Dips to $0.6566 Amid Strong US Economic Data Releases

The Australian dollar versus the US dollar (AUD/USD) experienced a slight decrease, falling 0.22% to $0.6566. This movement comes in the wake of various US economic data releases.

Notably, the Core Producer Price Index (PPI) for February exceeded expectations at 0.5% compared to a forecast of 0.3%, indicating potential inflationary pressures. Similarly, retail sales for the same month showed resilience, with a 0.6% increase against an anticipated 0.8%, suggesting robust consumer spending despite forecasts.

Unemployment claims also offered a positive surprise, registering at 209K versus an expected 218K, showcasing the strength of the US labour market. These figures collectively have bolstered the US dollar, applying downward pressure to the AUD/USD.

Looking ahead, traders are eyeing the Empire State Manufacturing Index and Industrial Production figures, with a particular focus on the preliminary University of Michigan consumer sentiment and inflation expectations.

The manufacturing index is anticipated to reflect continued contraction, which might temper the dollar’s strength, offering some reprieve to AUD/USD. However, strong industrial production figures or a higher-than-expected consumer sentiment could reinforce the dollar’s position, further challenging the AUD/USD.

Furthermore, the capacity utilization rate and preliminary University of Michigan inflation expectations will be critical in shaping market expectations regarding future inflation and, by extension, Federal Reserve policy actions.

Elevated inflation expectations could heighten concerns over persistent inflation, potentially supporting a stronger dollar environment.

As traders digest these indicators, the AUD/USD pair remains sensitive to shifts in US economic sentiment and policy expectations. Strong US data that bolsters the dollar could continue to exert downward pressure on AUD/USD, while any signs of economic weakening in the US might offer a lift to the pair.

Investors will closely monitor these developments to gauge the potential direction of the AUD/USD amidst fluctuating market dynamics.

On March 15, the Australian dollar versus the US dollar (AUD/USD) saw a modest decline, dropping 0.22% to settle at $0.6566. This positioning leaves the currency pair slightly below its pivotal mark of $0.6574, suggesting that future price actions could pivot around this level.

The technical setup outlines immediate resistance at $0.6596, with further ceilings at $0.6624 and $0.6668 that need to be surpassed for any significant upward movement. On the flip side, the support framework is firmly placed at $0.6550, extending to $0.6520, and deeper at $0.6479, ready to arrest further slides.

The Relative Strength Index (RSI), currently at 33, signals the pair might be entering oversold territory, potentially setting the stage for a rebound. Meanwhile, the 50-day Exponential Moving Average (EMA) at $0.6588 subtly supports the notion that the trend could reverse if the pair manages to climb above its pivot.

This delicate balance between bearish pressures and potential for recovery keeps the AUD/USD forecast intriguingly poised for future trading sessions.