Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6475.
- Add a stop-loss at 0.6600.
- Timeline: 1-2 days.
Bullish view
- Set a buy-stop at 0.6550 and a take-profit at 0.6600.
- Add a stop-loss at 0.6500.
The Australian dollar was flat against the US dollar on Wednesday morning as focus shifted to the upcoming US GDP and PCE report. The AUD/USD pair was trading at 0.6535, down from this month’s high of 0.6667.
US economic data ahead
The AUD/USD exchange rate reacted mildly to the mixed US consumer confidence, durable goods orders, and house price index data.
In a report, the Conference Board revealed that the country’s consumer confidence retreated to 104.7 in March, lower than the expected 106.90. It has been in a downward trend after peaking at 114.8 in January.
A lower consumer confidence report is seen as a leading indicator for the American economy because their spending is the biggest component of the GDP.
Similarly, the house price index (HPI) retreated from 0.1% in December to minus 0.1%. Analysts were expecting the figure to show that it rose to 0.2%.
On the positive sign, the country’s durable goods orders rose by 1.4% in February, a big increase from the previous drop of 6.9%. It was the first time in two weeks that orders rose. The core durable goods orders rose by 0.5%.
These numbers came a few days after the Federal Reserve delivered its second interest rate decision of the year. In it, the bank left rates unchanged between 5.25% and 5.50% and hinted that it will cut rates three times this year.
The next important AUD/USD news will come out on Thursday and Friday. The US will publish the second estimate of the fourth-quarter GDP on Thursday. After that, the statistics agency will release the important PCE report onn Friday.
The PCE report is an important measure of inflation. Economists expect the report to show that the headline PCE rose to 2.4% in February while core PCE rose to 2.8%.
AUD/USD technical analysis
The AUD/USD pair was relatively unchanged on Wednesday morning. It was trading at 0.6535, a few points below its highest point this week. On the 4H chart, the pair is consolidating at the 50-period and 25-period moving averages.
It has moved slightly above the ascending trendline, which connects its lowest point since February 13th. The pair has also formed a bearish flag pattern. Therefore, the outlook for the pair is bearish, with the next point to watch being at 0.6500. A break below that level will point to more weakness as sellers target the support at 0.6475, its lowest swing on March 5th.
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