AUD/USD is on a rebound after being on a downtrend since Monday. the currency pair is trading higher after data from the Census Bureau showed that US retail sales had stagnated in April. The numbers were the last piece to the week’s US inflation data. On Wednesday, the US Bureau of Labor Statistics released strong CPI figures that heightened concerns over an overheating US economy. According to the bureau, consumer prices rose by 0.8% in April on a month-on-month basis. Notably, that was the highest rate since 2009. Besides, it was significantly higher than the expected 0.2% and the prior month’s 0.6%.

Thursday’s PPI data also came in higher-than-expected at an annualized rate of 6.2% compared to the predicted 5.9% and March’s 4.2%. However, Friday’s US retail sales numbers have helped strengthen the Australian dollar against the US dollar. The data came in at 0.0% compared to March’s 10.7%. Economists had expected a reading of 1.0% as the impact of the stimulus checks begins to fade.

AUD/USD is also reacting to the remarks made by Federal Reserve’s officials on the ongoing inflationary pressures. The officials have downplayed the current inflation fears, an aspect that has reversed the greenback’s previous rallying. On Thursday, Governor Christopher Waller indicated that the central bank will not hike interest rates until inflation has moved past the target for a prolonged period. Thomas Barkin, Richmond’s Fed President, is also of the opinion that the expected inflation is transitory. As a reaction to these remarks, the dollar index is down by 0.4% at 90.35.

AUD/USD Technical Outlook

AUD/USD is up by 0.21% at 0.7745. The pair is rebounding after hitting a one-and-a-half week low of 0.7688. On a 4-hour chart, the pair is trading above the 25 and 50-day exponential moving averages. At the beginning of the next week, I expect it to surge higher to 0.7818, where it may experience some resistance. On the flip side, it may trade sideways along its current level of 07745 before falling to find support at 0.7750.

Leave a Reply

Your email address will not be published. Required fields are marked *

Sign Up for Our Newsletters

Get exclusive content in your inbox.

You May Also Like

EUR/USD Forecast Ahead of US Inflation and Retail Sales Data

The EUR/USD pair surged on Friday after the disappointing US non-farm payrolls (NFP) data. The US will publish the latest inflation and retail sales data.

GBP/USD Forecast with BoE Interest Rate Decision on the Horizon

GBP/USD is seesawing along 1.3800 ahead of the BoE interest rate decision. It is likely to be range-bound between 1.3800 and 1.3900 ahead of the event.

GBP/USD Forecast Ahead of the UK Retail Sales

GBP/USD has eased on its decline ahead of the UK retail sales data. The data comes at a time when UK government postponed reopening by a month.

GBP/USD Pulls Back Ahead of UK’s GDP Data

The GBP/USD pair was in the red earlier on Wednesday ahead of UK’s GDP data for the second quarter. The US CPI data will be released later in the day.