Key Fundamental Factors:
- US Trade Policy:
- President Trump temporarily exempts automakers in Mexico and Canada from tariffs for one month.
- He is also considering removing tariffs on certain agricultural products from both countries.
- Australian Economic Data:
- Trade surplus rose to 5,620 million in January (higher than expected).
- Exports increased 1.3%, reaching an 11-month high, while imports fell 0.3%.
- Building permits surged 6.3%, marking the second month of growth.
- GDP growth in Q4 2024 was 0.6% (higher than expected).
- US Economic Factors:
- The US Dollar (DXY) is at 104.30, struggling due to concerns about slowing growth.
- US job market slowdown: ADP reported 77K new jobs in February (far below the 140K forecast).
- Traders await Friday’s Nonfarm Payrolls (NFP) report, showing 160K job gains.
- US Manufacturing PMI dropped to 50.3 (slightly below expectations).
- China’s Economic Impact:
- China’s Services PMI rose to 51.4, signaling steady economic activity.
- China cleared $530 billion in bad loans and plans to prioritize real estate recovery in 2025.
- China targets 5% economic growth for 2025 while stabilizing the stock and property markets.
- Geopolitical Risks:
- China threatens a strong response to Trump’s tariff hikes, which may affect the Australian dollar due to Australia’s trade reliance on China.
- RBA Deputy Governor Andrew Hauser warns that global trade uncertainty is at a 50-year high, which could impact business and investment confidence.
Key Takeaway for Traders:
- AUDUSD shows short-term bullish momentum but faces resistance near 0.6380 and 0.6408.
- The US Dollar remains under pressure, but economic data (NFP report) could shift sentiment.
- Keep an eye on China’s trade policies and US tariffs, as they could influence AUD’s strength.
AUDUSD – D1 Timeframe
The price recently broke below the previous lows on the daily timeframe chart of AUDUSD, followed by a quick retracement. The retracement has now reached the supply zone and is expected to come under bearish pressure soon. Let’s take a look at the price action on the lower timeframe, though.
AUDUSD – H4 Timeframe
The price action on the 4-hour timeframe chart of AUDUSD falls perfectly in line with the bearish sentiment already described above. In addition to the supply zone occurring at the 88% Fibonacci retracement level, there is also a confluence from the SBR pattern, as highlighted in the 4-hour timeframe chart attached above.
Analyst’s Expectations:
- Direction: Bearish
- Invalidation- 0.64109
- Target- 0.62313
