Audusd Lacks Direction

Audusd Lacks Direction by Emily Clark last updated on March 03, 2024

Aud/Usd Lacks Direction Near 0.6550

AUD/USD is trading in a narrow range near the 0.6550. Earlier, the pair had lifted from lows to eventually touch the 0.6550 handle, but now it lacks direction.

The next impetus that will dictate the direction of the AUD/USD is the meeting minutes of the Federal Reserve and the RBA. Whichever central bank gives a hint of rate cuts will be the one to lose in the FX market. However, the rate cut announcement will be rejoiced by the equity market.

Aud Looks Toward Pboc

The Chinese markets are again open after the Lunar New Year celebration. This is a factor that supports a stronger AUD. The AUD traders will also look forward to the PBoC's interest rate decision.

The market perceives that the Public Bank of China will likely maintain its current stance (dovish) as the economy is struggling. Chinese authorities can't afford a surprise with fewer employment options and weak domestic spending.

And since the AUD is closely linked to the Chinese economy, any decision from the PBoC will also impact the Australian Dollar.

Meanwhile, the DXY appears to be under water after the PPI and the CPI release, which has lowered the odds of rate cuts.

On the H1, AUD/USD has made a solid U-turn and has already established a weekly high near the 0.6540 handle. Additionally, the pair's short-term outlook is bullish, as it is sitting comfortably above the 200 EMA (0.6517).

quick look at RSI shows that the average range is between 40 and 80, which indicates a neutral to bullish outlook for AUD/USD. In short, even the RSI hints at more upside for the AUD/USD.

However, the technical analysis shows that the pair needs to break the 0.6552 before attempting a test of the 0.6600 handle.

On the downside, the 0.6477 and the 0.6550 levels can support the Aussie Dollar, followed by 0.6443 and 0.6400.