The employment cost, specifically wages, is expected to increase by 0.9% quarter-on-quarter in Q1 2024. This potential rise in wages could have significant implications on investor expectations of a September Fed rate cut. Higher wages may lead to increased disposable income and consumer spending, potentially impacting inflation rates. However, it is important to note that the CB Consumer Confidence Index may play a more significant role in influencing the Fed rate path. A forecasted decline in the Index from 104.7 to 104.0 in April could indicate a possible pullback in consumer spending and softer inflation.
In addition to wage data and consumer confidence figures, other important US economic indicators such as the Chicago PMI and house price data will also be key factors in determining AUD/USD trends. Nonetheless, it is likely that wage data and consumer confidence figures will have a more substantial impact on the currency pair. Australian retail sales figures, US labor market numbers, and the FOMC press conference will be crucial near-term considerations. Positive Australian retail sales could increase expectations of an RBA rate hike, while upbeat US data could diminish the likelihood of Fed rate cuts in 2024.
The AUD/USD has been trading above the 50-day EMA but below the 200-day EMA, indicating conflicting short-term and long-term price signals. A breakthrough above the 200-day EMA and the $0.65760 resistance level could lead to a bullish rally towards the $0.66 handle. On the other hand, a decline below the $0.65500 support level could signal a potential drop to the 50-day EMA, with further bearish movement towards the $0.64582 support level. Keeping an eye on the 14-period Daily RSI reading of 57.46 will be crucial in determining whether the AUD/USD has the potential to reach the $0.66 handle before entering overbought territory.
The interaction between various economic indicators such as employment cost, consumer confidence, and technical analysis will play a significant role in shaping AUD/USD trends. While wage data and consumer confidence figures will likely be the primary drivers of market sentiment, other economic factors and technical signals should not be overlooked. Traders and investors should closely monitor these indicators to make informed decisions about the future direction of the AUD/USD currency pair.