Aud/usd rises slightly, ends October with 4.87% decline amid mixed economic data

AUDUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.11%	7.2 Pips
Week to-date	-0.37%	-24.4 Pips
October	-4.87%	-336.8 Pips

Upcoming key events (London Time)

Fri 12:30 PM USD Nonfarm Payroll Employment

What happened lately

In the United States, several economic indicators showed mixed results. Personal income increased by 0.3% in September, up from 0.2% in August, indicating a slight improvement in household income. The PCE Price Index for the same month over a 12-month period decreased slightly to 2.1% from 2.2% in August, while on a monthly basis, it rose to 0.2% from 0.1%. The core PCE Price Index, excluding food and energy, increased to 0.3% from the revised 0.2% in August. Despite these inflation metrics, consumer spending experienced a decrease. Notably, the Initial Unemployment Insurance Claims for the week ending October 26 also showed a decrease, indicating a potential improvement in the labor market. The Employment Cost Index (ECI) fell to 0.8% in Q3 from 0.9% in Q2, and the GDP in Q3 also decreased to 2.8% from 3.0% in Q2. Pending home sales rose significantly by 7.4% in September. Overall, these data point to moderate economic activity with inflationary pressures easing slightly, as reported by the Bureau of Economic Analysis and the Department of Labor.

In Australia, economic activity exhibited signs of mild recovery. Retail trade for the third quarter increased to 0.5% from a negative 0.3% in the previous quarter, indicating a rebound in consumer spending, yet retail trade turnover for September slightly declined. Building dwelling approvals also showed an upward trend, rising to 4.4% in September from a significant drop in August. Inflation metrics were mixed; the RBA Trimmed Mean CPI over 12 months decreased to 3.5% in Q3 from 3.9% in Q2. The 3-month CPI inflation rate also declined to 0.2% compared to 1% in Q2. However, the Trimmed Mean CPI remained steady at 0.8% in Q3. Such data, sourced from the Australian Bureau of Statistics and the Reserve Bank of Australia, suggest a steady yet cautious economic rebound with subdued inflationary pressures.

The recent economic data from both countries are likely to influence the AUD/USD exchange rate. The Australian dollar showed a slight increase of 0.11% against the U.S. dollar to 0.65787. However, by the end of October, it saw a significant decrease by 4.87%. The mixed economic data from the U.S., showcasing slowing inflation and economic activity, coupled with the recovering yet cautious outlook from Australia, presents a challenging environment for the AUD/USD. It is essential to consider upcoming events like the U.S. Nonfarm Payroll Employment, which may further impact the currency pair depending on the new data released.

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What can we expect from AUDUSD today?

AUDUSD on Thursday rose 0.11% to 0.65787. Price is below 9-Day EMA while Stochastic is rising.

Updated daily direction for AUDUSD looks bullish as the pair ended higher after Thursday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 0.65955 with break above could target R2 at 0.66123 or figure level area. While towards the downside, we are looking at daily low of 0.65393 as an important support. Break below this level could weaken the current bullish momentum. A break above 0.65842 may suggest continuation after recent positive movement.

For the week to-date, take note that AUDUSD is bearish as the pair posted lower by -0.37%.

AUDUSD ended month of October trading session down by -4.87% or -336.8 pips lower.

Key levels to watch out:

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