Economists are predicting a 2.8% increase year-on-year in the Core PCE Price Index for April, with personal income and spending expected to rise by 0.3%. While personal income saw a 0.5% increase in March and spending was up by 0.8%, a higher Fed rate path could lead to a rise in borrowing costs and a reduction in disposable income. This downward trend in disposable income could potentially impact consumer spending and dampen inflationary pressures driven by demand.
Investors will be closely monitoring FOMC member reactions to the US Personal Income and Outlays Report. In the near term, the AUD/USD trends are likely to be influenced by PMI numbers from China and the US Personal Income and Outlays Report. Positive numbers from China could increase demand for the Aussie dollar. However, if the US Report exceeds expectations, it could lead investors to reconsider their bets on a potential Fed rate hike in September and affect the AUD/USD exchange rate.
Currently, the AUD/USD is trading above the 50-day and 200-day EMAs, indicating bullish price signals. If the Aussie dollar returns to the $0.66500 level, it could potentially test the $0.67003 resistance level. Breaking above this resistance level could pave the way for a move towards the $0.67500 handle. It is important to consider the impact of China PMI numbers and the US Personal Income and Outlays Report on the future movement of the AUD/USD exchange rate.
On the downside, a break below the 50-day EMA could bring the 200-day EMA and the $0.65760 support level into play. Buying pressure is expected to increase at the $0.65760 support level, especially since the 200-day EMA coincides with this level. With the 14-period Daily RSI reading at 53.59, there is a possibility of the AUD/USD climbing towards the $0.67500 handle before entering overbought territory.
Economic data such as the Core PCE Price Index, personal income, and spending can have a significant impact on the AUD/USD exchange rate. It is essential for investors to closely monitor these economic indicators and their implications on the currency pair to make informed trading decisions.