The upcoming session will shed light on employment cost – wages and the CB Consumer Confidence, both of which are crucial factors that could influence the AUD/USD trends. Economists predict a 0.9% increase in employment cost – wages in Q1 2024, following a similar rise in Q4 2023. Higher-than-expected wages could potentially impact investor expectations of a September Fed rate cut, leading to changes in disposable income and consumer spending.
Consumer Confidence Index Expectations
On the other hand, the CB Consumer Confidence Index is also anticipated to play a significant role in determining the Fed rate path. Economists project a decline in the Index from 104.7 to 104.0 in April, which could reflect a pullback in consumer spending and softer inflation. This, in turn, might have implications for the AUD/USD trends, overshadowing other US economic indicators such as the Chicago PMI and house price data.
The AUD/USD remains sensitive to Australian retail sales figures, US labor market data, and the FOMC press conference. Positive Australian retail sales could increase expectations of an RBA rate hike, while upbeat US economic data might reduce the chances of 2024 Fed rate cuts. However, despite these factors, a Fed rate hike currently seems unlikely.
From a technical standpoint, the AUD/USD is currently above the 50-day EMA but below the 200-day EMA, signaling conflicting short-term and long-term price signals. A breakout above the $0.65760 resistance level could propel the pair towards the $0.66 handle, while a breakdown below $0.65500 may lead to a test of the 50-day EMA and the $0.64582 support level.
RSI Analysis and Potential Price Targets
With a 14-period Daily RSI reading of 57.46, the AUD/USD could potentially reach the $0.66 handle before entering overbought territory. Traders should closely monitor key levels and economic data releases, including manufacturing PMI numbers from China, to gauge the future direction of the pair.
Employment cost – wages and consumer confidence play a vital role in shaping the AUD/USD trends. While short-term movements may be influenced by specific data releases, traders should also consider the broader economic outlook and technical indicators to make informed trading decisions.