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.