- AUD/USD rises ahead of key US data that could impact the pair.
- US Producer Prices and Retail Sales are on the docket on Thursday.
- The RBA’s relatively hawkish stance is a supporting factor for the pair.
On Thursday, the AUD/USD pair is trading in the 0.6600s, showing a marginal increase of three hundredths of a percent during the European session, as traders brace for significant macroeconomic releases that could sway the pair’s direction.
Scheduled for release at 12:30 GMT, both US Producer Prices and Retail Sales data are awaited eagerly, given their potential impact on inflation expectations and the discourse surrounding Federal Reserve interest rate adjustments.
Analysts anticipate a decline in the Core Producer Price Index (PPI) excluding Food and Energy, with expectations pointing to a decrease from 2.0% year-on-year in January to 1.9% in February. On a monthly basis, the forecast suggests a modest increase of 0.2%, compared to the previous month’s 0.5% advance.
In terms of the headline Producer Price Index (PPI), projections indicate a year-on-year gain of 1.1% in February, up from 0.9% in January, with a monthly increase of 0.3%, mirroring the previous month’s figure.
For US Retail Sales, a rebound is expected in February, with forecasts suggesting a 0.8% rise following January’s 0.8% decline. Stronger-than-expected sales figures typically stimulate inflationary pressures, potentially leading to a more hawkish stance on interest rate policy and consequently exerting a bullish influence on the USD (and bearish impact on AUD/USD).
Technical Analysis: AUD/USD in long-term downtrend
AUD/USD is in a long-term downtrend, producing lower highs and lower lows.
The AUD/USD has recently retreated from touching a significant trendline, raising concerns of further downside potential in alignment with its longer-term downtrend.
Should the pair breach the last swing low recorded in October 2023 at 0.6442, it would reinforce the bearish sentiment, potentially leading to a continued decline towards the October 2022 lows around 0.6170.
Conversely, a breakout above the December 2023 high of 0.6871 would suggest a possible reversal in the long-term trend, signaling a potential upward trajectory for the Australian Dollar toward brighter prospects.
