AUDUSD Extends Downside as Australian Consumer Sentiment Falls

AUDUSD has been declining since the end of September and sellers remain in charge, as fundamentals and technicals point further down for this pair. The 0.65 level remains the line in the sand for AUD sellers right now, and the price is approaching it, after the sudden jump last Thursday, which has been erased now.

The Reserve Bank of Australia’s hawkish stance has provided some support to AUD/USD, yet with Australia’s and China’s economies under strain, there’s little else to drive a sustained rally. Price action further points to a downward trend for the currency pair. On Thursday, optimism surrounding a potential Chinese stimulus led to a brief spike in risk assets, including commodity-linked currencies like the AUD.

AUD/USD Chart H4 – Sellers Remain in Charge

However, by Friday, sentiment shifted as China’s response again fell short of market hopes. This led to a rally that briefly lifted AUD/USD by one cent to the 0.67 range, but with no significant surprises in China’s stimulus package, enthusiasm faded, and AUD/USD retraced about a cent. Following a weak bounce, sellers reentered the market yesterday, reinforcing the bearish outlook as moving averages on the daily chart continue to cap highs.

Australia Business Confidence for November:

• • Increased to +5 from -2 in October
  • Highest level in nearly two years, signaling optimism
• Business Conditions:
  • Held steady at +7, maintaining positive ground
• Sub-Indexes:
  • Sales: Rose by 1 point to +13, reflecting strong demand
  • Profitability: Remained steady at +5
  • Employment Intentions: Improved from -2 to +3, indicating better hiring outlook
  • Input Costs Growth: Slowed to 0.9% q/q, down from 1.3% in September
  • Product Prices Growth: Eased to 0.5% from 0.6%
  • Labor Costs Growth: Reduced to 1.4%, compared to 1.9% previously
• NAB Report Commentary:
  • “Confidence spiked in the month after an extended period of below-average reads.”
  • “While it’s just one month, this is an encouraging sign alongside a tentative improvement in forward orders.”
  • “The survey, like other price indicators, continues to suggest an ongoing gradual easing in inflation pressure, but also that there is still some way to go in the moderation.”

Australian Consumer Confidence for November:

• Monthly Consumer Confidence Index increased by +5.3% m/m, following a prior rise of +6.2% m/m
• The Westpac Consumer Confidence Index climbed to 94.6 from 89.8 in the previous month

AUD/USD Live Chart