- Business conditions in Australia were little changed in March.
- Investors have scaled back Fed rate cut expectations since the March jobs report.
- Economists expect a decline in US inflation in March.
The AUD/USD outlook improves as the Aussie stands its ground after the latest data revealed stable business conditions in Australia in March. Meanwhile, the dollar was weak despite a rise in Treasury yields as investors cautiously awaited the US inflation report.
–Are you interested in learning more about buying NFT tokens? Check out our detailed guide-
Business conditions in Australia were little changed in March as higher interest rates put pressure on the economy. Moreover, sales and employment were stable. However, companies remained concerned about the economic outlook as the Reserve Bank of Australia is reluctant to cut rates any time soon. At the moment, the markets expect the first reduction around November.
Meanwhile, in the US, investors lowered expectations of a rate cut as the March jobs report revealed a still-hot labor market. Demand in the economy is still high. Therefore, any rate cut by the Fed must be well timed to avoid a spike in inflation.
Consequently, there is doubt in the market whether the Fed will start cutting interest rates in June. Moreover, markets now expect only a 60 basis point rate cut in 2024.
The next big economic event in the US is the release of consumer inflation data. Economists expect a drop in inflation in March. However, these figures could also surprise to the upside. In that case, rate cut bets would fall further. Moreover, investors would expect the first decrease in July.
AUD/USD key events today
There are no key events from Australia or the US today. As a result, investors will continue to speculate ahead of the US inflation report.
AUD/USD Technical Outlook: Bulls target higher high to confirm recent breakout
On the technical side, the AUD/USD price is bullish as it is trading above the recently broken trend line. The trend recently turned bullish when the price broke above the resistance trend line. Moreover, it pulled back to retest the trend line and is now climbing.
–Are you interested in learning more about the UK Trading Platform overview? Check out our detailed guide-
Bulls need to make a higher high above the critical resistance level of 0.6620 to confirm a breakout. There is a good chance that this will happen because the bullish bias is strong. The price is well above the 30-SMA and the RSI is in bullish territory above 50. Therefore, the bulls may soon retest the key level of 0.6660.
Do you want to trade Forex now? Invest in eToro!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing money.
