The AUD/USD pair is heavily influenced by economic data releases from both Australia and the United States. These data points can significantly impact buyer demand for the Aussie dollar and dictate the overall direction of the currency pair. In this article, we will analyze the potential effects of key economic indicators on the AUD/USD pair in the upcoming week.
The gross domestic product (GDP) numbers for Q1 are expected to be released on Wednesday, which could have a significant impact on buyer demand for the Aussie dollar. Economists forecast a modest 0.2% expansion in the Australian economy, following a similar growth rate in Q4 2023. Additionally, trade data for April will be crucial, with upward trends in imports and exports signaling an improving demand environment. Higher exports and a wider trade surplus would be considered positive for the Aussie dollar. However, these statistics are unlikely to influence the Reserve Bank of Australia’s (RBA) rate path, as the central bank is more focused on wages, household spending, and inflation.
Data from China will also attract investor attention, as the country accounts for one-third of Australian exports. The China Caixin Manufacturing Purchasing Managers’ Index (PMI) is expected to increase in May, which could signal a pickup in demand from China. This, in turn, could boost the Australian economy and support the Aussie dollar.
Across the Pacific, the US economic calendar is also packed with key releases that could impact the AUD/USD pair. The ISM Manufacturing PMI, factory orders, and JOLTs Job Openings will be closely watched, with any unexpected results potentially influencing the currency pair. Moreover, the ISM Services PMI and ADP Employment Change numbers on Wednesday will provide insight into investor bets on a potential September Federal Reserve rate cut. Weaker job creation rates and lower input prices in the US services sector could signal a softer inflation outlook, affecting buyer demand for the AUD/USD.
The US labor market will remain in focus on Thursday and Friday, with initial jobless claims and the US Jobs Report set for release. Any unexpected increase in jobless claims could impact investor expectations of a September Fed rate cut. The US Jobs Report, particularly wage growth figures and nonfarm payrolls, will also be closely monitored for their influence on the AUD/USD pair.
In addition to economic data, technical analysis of the AUD/USD pair suggests bullish price trends, with the currency pair comfortably above the 50-day and 200-day Exponential Moving Averages (EMAs). A breakout above key resistance levels could further support the bullish momentum in the AUD/USD pair. Conversely, a break below crucial support levels could indicate a shift in sentiment towards the pair.
Upcoming economic data releases from Australia, China, and the US will play a crucial role in determining buyer demand for the AUD/USD pair. Traders and investors should closely monitor these data points to make informed decisions about their positions in the currency pair. Technical analysis also suggests bullish tendencies in the AUD/USD pair, but key support and resistance levels should be carefully considered in trading strategies.