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AUDUSD Market Update

1/4/2023 1:14 PM

This week, the AUD/USD pair has ambiguous dynamics: earlier, the price corrected downwards (to the area of 0.6685), but then regained the lost positions. Pressure on the Australian currency is exerted by an increase in the number of people infected with coronavirus infection in China, and on the American currency – the publication of the minutes of the December meeting of the US Fed, scheduled for today.

The deterioration of the epidemiological situation after the beginning of the lifting of quarantine restrictions by the Chinese authorities has already led to a disruption of mobility, business activity and put pressure on demand. Under these conditions, the export of raw materials from Australia, primarily iron ore, may be seriously reduced. On the other hand, the minutes of the US Fed, as many investors hope, may contain data on a possible slowdown in the pace of monetary policy tightening due to the weakening of inflationary pressure in the country. In this case, the USD may lose some of its positions in relation to its main competitors. As for the overall economic situation, it remains difficult in both Australia and the USA, as evidenced by the latest December data on business activity in the manufacturing sector: the Australian index fell from 51.3 points to 50.2 points, and the American index from 47.7 points to 46.2 points.

Today, investors will follow the publication of November data on the number of open vacancies in the US JOLTS labor market, where a decrease in the value from 10.334M to 10,000M is expected. The further dynamics of the AUD/USD pair will largely depend on the market's reaction to these data and the regulator's protocols.

Technically, the price continues to correct upwards in relation to the long-term downward trend. Currently, the quotes are close to 0.6835 (Murray level [8/8]), the breakout of which will allow the instrument to strengthen its positions and reach the area of 0.6958 (Murray level [+1/8]) and 0.7080 (Murray level [+2/8]). If the price moves below 0.6713 (Murray level [7/8]), supported by the middle line of the Bollinger Bands, the downward dynamics will be able to resume to the levels of 0.6590 (Murray level [6/8]) and 0.6470 (Murray level [5/8]).

Technical indicators do not give a single signal: the Bollinger Bands are horizontal, the MACD histogram is stable in the positive zone, and the Stochastic is directed downwards.

Resistance levels: 0.6835, 0.6958, 0.7080. | Support levels: 0.6713, 0.6590, 0.6470.

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