AUD/USD reverses gains and aims toward 0.6650 ahead of Aussie GDP
- AUD/USD declines to 0.6648, down 0.60%, despite speculation of Fed rate cuts due to weaker US data.
- US job openings fall to 8.059 million in April, the lowest since early 2021, below estimates.
- Upcoming Australian PMIs and Q1 GDP figures expected to show 0.2% QoQ and 1.2% YoY growth.
The Australian Dollar reversed its course and registered losses of 0.60% against the US Dollar on Tuesday, even though data from the United States sparked speculations that the Fed would cut rates in the year. As the Wednesday Asian session begins, the AUD/USD trades at 0.6648, virtually Unchanged.
Aussie Dollar on the defensive, despite increased Fed rate cut speculation
US job openings in April were lower than expected and marked the lowest level since early 2021. The reading reached 8.059 million, lower than estimates of 8.34 million and down from March's 8.355 million.
Other data showed that US Durable Goods Orders rose by 0.6% MoM in April, which is below both the estimates and the previous reading of 0.7%.
Following the data release, the December 2024 fed funds rate futures contract showed that most traders expect at least 35 basis points of rate cuts via the Chicago Board of Trade (CBOT).
In the meantime, the 10-year US Treasury bond yields shed six basis points to 4.332%, while the US Dollar Index (DXY) climbed some 0.10% at 104.14.
The schedule will feature the release of PMIs and March Gross Domestic Product (GDP) figures on the Aussie's front. The GDP for the first quarter of 2024 is expected to rise by 0.2% QoQ and 1.2% YoY.
AUD/USD Price Analysis: Technical outlook
On Monday, I wrote, “From a technical perspective, a ‘double bottom’ chart pattern looms, which could pave the way to test 0.6750 and beyond. However, to confirm its validity, buyers must crack the latest cycle high of 0.6714.” It should be said that the ‘double bottom’ has been invalidated, as the AUD/USD formed a ‘bearish engulfing’ candle pattern, paving the way for further losses.
With that said, if sellers push the price below 0.6600, the next stop would be the 50-day moving average (DMA) at 0.6571, followed by the 100-DMA at 0.6561 and the 200-DMA at 0.6536.
For a bullish resumption, buyers need to keep the exchange rate above 0.6600 if they want to challenge the 0.6700 figure.
