Bearish Signs for AUD/USD As It Quickly Returns to Test the Support
AUD/USD made a strong bearish reversal early this month after the impressive US ISM services and jobs reports, losing around 3 cents and falling to 0.6850 where it formed a support zone. The 20 SMA (gray) turned into resisgtance on the daily chart, which was another strong sign that the trend was changing after being bullisbh for several months.
That moving average rejected the price and we saw another attempt to the downside by the sellers, which pierced the 50 SMA (yellow). But, the price returned above it as the USD started to retreat lower on Friday, so that didn’t count as a break. On Monday we saw a bounce as the USD retreat continued, but yesterday the jump above 50 points in US PMI services report confirmed the jump in ISM services and that the US economy is going under a rebound so far in Q1, after the slowdown in Q4.
Besides that, the slowdown in inflation is losing momentum, so the FED has more reasons to justify the rate hikes in the coming months, which are keeping the USD bullish. Later today, we will see the release of the Monetary Policy Meeting minutes from the last FOMC meeting, which will provide in-depth insights into the economic conditions that influenced their decision and what plans they have on where to set interest rates.
Although, we have seen more proof of an economic rebound in the US since then, which will keep the USD bullish and AUD/USD bearish. Besides that, earlier today we had the Q4 Wage Price Index from Australia.
Australian Wages data
- Q4 2022 wages growth +0.8% vs. +1% expected
- Q3 wages increased by 1%
- Wages YoY increased by +3.3% vs +3.5% expected
- Prior wages YoY were +3.1%
AUD/USD Live Chart
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