AUD/USD – Australian dollar steady, Chinese Manufacturing PMI next

AUD/USD is subdued in the Monday session. Currently, the pair is trading at 0.7048, up 0.06% on the day. On the release front, there are no Australian events. Later in the day, China releases manufacturing PMI, which is expected to tick up to 50.7 points in April, after a score of 50.5 in the previous release. The 50-level separates contraction from expansion, so a reading just above 50 points to stagnation. The U.S. releases Core PCE Price Index and Personal Spending for February and March. The markets are expecting a strong gain of 0.7% for Personal Spending in March. On Tuesday, the U.S. releases Chicago PMI and CB Consumer Confidence. Australia will post the AIG manufacturing index.

It was a brutal week for the Aussie, which dropped 1.5 percent. A combination of weak data out of Australia and sharp U.S. numbers sent the currency reeling. Australian CPI slowed to 0.0% in Q1, shy of the estimate of 0.2%. This marked the weakest reading since 2016. Inflation remains well below the RBA’s target band of 2-3%, and this disappointing CPI release underscores concerns that the target band will remain elusive. Soft inflation and a somber RBA have raised speculation that the RBA could lower rates in a bid to stimulate the economy, perhaps as early as this summer. Investors will now shift their attention to China, as the Aussie is sensitive to key Chinese releases. A strong Chinese manufacturing PMI could boost the Australian dollar.

Meanwhile, U.S. numbers impressed late last week, as the U.S. dollar made broad gains. Durable goods orders climbed 2.7%, crushing the estimate of 0.7%. Core durable goods orders gained 0.4%, marking a 9-month high. This was followed by an initial GDP release of 3.2% in Q1, well above the estimate of 2.2%. This was much stronger than Final GDP for Q4, which came in at 2.2%.

Dodging the information avalanche

A massive week for currencies, stocks and bonds

AUD/USD Fundamentals

Monday (April 29)

  • 8:30 (Feb. Data) – US Core PCE Price Index. Estimate 0.2%
  • 8:30 US Core PCE Price Index. Estimate 0.1%
  • 8:30 (Feb. Data) – US Personal Spending. Estimate 0.2%
  • 8:30 US Personal Spending. Estimate 0.7%
  • 8:30 US Personal Income. Estimate 0.4%
  • 21:00 Chinese Manufacturing PMI. Estimate 50.7
  • 21:30 Australian Private Sector Credit. Estimate 0.3%

Tuesday (April 30)

  • 8:30 US Employment Cost Index. Estimate 0.7%
  • 9:45 US Chicago PMI. Estimate 59.1
  • 10:00 US CB Consumer Confidence. Estimate 126.2
  • 18:30 Australian AIG Manufacturing Index

*All release times are EDT

* Key events are in bold

AUD/USD for Monday, April 29, 2019

Open: 0.7043 High: 0.7061 Low: 0.7037 Close: 0.7048

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.6744 0.6825 0.6970 0.7085 0.7190 0.7240

AUD/USD ticked higher in the Asian session but has given up these gains in European trade

  • 0.6970 is providing support
  • There is resistance at 0.7085
  • Current range: 0.6970 to 0.7085

Further levels in both directions:

  • Below: 0.6970, 0.6825 and 0.6744
  • Above: 0.7085, 0.7190, 0.7240, and 0.7315

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.