News of the Week (September 23—September 27): AUDUSD Review

AUDUSD poised for a move—traders should stay alert!

The AUDUSD pair, often referred to by traders as the “Aussie,” is a major currency pair representing the exchange rate between the Australian and US Dollar. The Australian Dollar is heavily influenced by commodity prices (especially iron ore and gold), interest rate decisions by the Reserve Bank of Australia, and domestic economic data like employment and inflation. On the other hand, the US dollar responds to US economic indicators, including employment reports, inflation data, and decisions by the Federal Reserve.

US manufacturing purchasing managers index (PMI), Sep 23, 15:45 (GMT+2)

The US Manufacturing PMI is forecasted at 48, up slightly from the previous 47.9. If the PMI result is better than expected, signaling stronger-than-anticipated growth in the manufacturing sector, this would likely strengthen the US Dollar. In that case, the AUDUSD pair would likely fall as the stronger Dollar weighs on the Australian Dollar. However, if the PMI falls short of expectations, reflecting further contraction in manufacturing, the US Dollar could weaken. This would likely lead to a rise in the AUDUSD pair as the Australian Dollar strengthens relative to the US currency.

Australia interest rate decision, Sep 24, 6:30 (GMT+2)

The Reserve Bank of Australia is expected to leave interest rates unchanged at 4.35%. If the RBA’s decision or accompanying statement turns out to be more hawkish than expected, such as signaling a future continuation of rates at current levels, it could lead to a slight rise in the Aussie dollar, pushing AUDUSD higher. On the other hand, if the RBA suddenly cuts rates or dovish forecasts suggest a softer approach to monetary policy, the Australian dollar is likely to weaken. This will lead to a decline in AUDUSD.

The Bank of Australia rate was last changed on November 7, 2023, from 4.10% to 4.35%, causing the price to spike!

US GDP QoQ, Sep 26, 14:30 (GMT+2)

The US GDP is forecasted to grow strongly at 3.0%, up from the previous 1.4%. If the actual GDP figure exceeds this forecast, indicating even stronger economic expansion, the US Dollar would likely gain further strength. In this scenario, the AUDUSD pair would likely decline as the US Dollar strengthens, overshadowing the Australian Dollar. Conversely, the US dollar could lose momentum if the GDP decreases more than expected. This would likely lead to an upward movement in the AUDUSD pair.

In the Daily timeframe, AUDUSD formed a rising wedge pattern in a short-term bullish impulse. The price has reached the upper trend line, with %R indicating a significant overbought condition. However, at the same time, Momentum has risen above the 100.0 level.

• If the price breaks the trend line above the resistance at 0.6820, the upside will be 0.6950, corresponding to 161.8 Fibonacci;
• A rebound and a break of the lower trendline below 0.6780 support will start a bearish scenario to 0.6650.