The Australian Dollar (AUD) declined after the release of mixed economic data from Australia and China’s NBS Purchasing Managers Index (PMI) on Thursday. Despite this, the AUD was supported by expectations for a hawkish policy outlook from the Reserve Bank of Australia (RBA), preventing significant downside for the AUD/USD pair.
Australian Retail Sales in September rose by 0.1% month-over-month, falling short of the expected 0.3% and significantly lower than the previous month’s 0.7% growth. However, on a quarterly basis, Retail Sales increased by 0.5% in Q3, rebounding from a 0.3% decline in the previous quarter.
Meanwhile, the US Dollar (USD) gained traction amidst market caution ahead of the upcoming US presidential election. Despite this, the USD faced headwinds as the US Gross Domestic Product (GDP) annualized only expanded by 2.8% in Q3, below expectations.
Traders are now focusing on key upcoming US data releases, including the PCE inflation data on Thursday and Nonfarm Payrolls (NFP) on Friday.
In addition to the economic data, the Australian Dollar faced pressure from lower-than-expected third-quarter Consumer Price Index (CPI) data released on Wednesday. However, mixed economic data from the US provided some balance.
The ADP Employment Change report in the US showed that private businesses added 233,000 workers in October, the largest increase since July 2023. This exceeded expectations and marked a positive sign for the US labor market.
Despite the uncertain economic environment, the Reserve Bank of Australia indicated that a rate cut in November appears unlikely, signaling a commitment to guide inflation back to the target range and support employment.
Technical analysis of the AUD/USD pair shows that it is currently trading near a descending channel’s upper boundary. The 14-day Relative Strength Index (RSI) suggests a bearish trend. Support levels for the pair are around 0.6510 and 0.6500, while resistance levels are near 0.6580 and 0.6600.
The table showing the percentage change of the Australian Dollar against major currencies indicates that the AUD was the weakest against the Swiss Franc.
Overall, the economic indicators and market trends point towards a mixed outlook for the Australian Dollar, with traders closely monitoring the upcoming data releases for further direction.
