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Weak Data Prompts AUD Rally to Stall, Politburo Supportive At The Margin

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  • Weaker-than-expected data overnight has weighed on the Australian dollar, putting a temporary halt to the bullish developing sentiment for the currency. Domestic retail sales data overnight disappointed, with the ABS noting that "outside of the pandemic period and introduction of the GST, this is the weakest growth on record when comparing turnover to the same time in the previous year."
  • Despite the China manufacturing PMI registering above 50 for the second consecutive month, the data was unable to halt the AUD slide overnight. However, the current bullish phase in AUDUSD remains intact despite today’s pullback. Furthermore, signs of expedited easing and bond issuance in the latest Politburo report should be AUD supportive at the margin.
  • Overall, resistance at 0.6528, the 50-day EMA, has been breached and the clear break highlights a stronger reversal that signals scope for a climb towards 0.6644, the Apr 9 high. Initial support comes in at 0.6441.
  • For EURAUD (+0.55%), we highlighted a trendline break from the 2023 lows yesterday and today’s recovery is approaching a retest. The 20-day EMA at 1.6476 may also offer resistance for the cross.
  • Similar price action for the Kiwi has seen very little movement for AUDNZD. As a reminder, the pair tested above 1.1000 on Monday for the first time since June 2023 and the subsequent drift lower may be a result of a temporarily overbought condition unwinding.
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  • Weaker-than-expected data overnight has weighed on the Australian dollar, putting a temporary halt to the bullish developing sentiment for the currency. Domestic retail sales data overnight disappointed, with the ABS noting that "outside of the pandemic period and introduction of the GST, this is the weakest growth on record when comparing turnover to the same time in the previous year."
  • Despite the China manufacturing PMI registering above 50 for the second consecutive month, the data was unable to halt the AUD slide overnight. However, the current bullish phase in AUDUSD remains intact despite today’s pullback. Furthermore, signs of expedited easing and bond issuance in the latest Politburo report should be AUD supportive at the margin.
  • Overall, resistance at 0.6528, the 50-day EMA, has been breached and the clear break highlights a stronger reversal that signals scope for a climb towards 0.6644, the Apr 9 high. Initial support comes in at 0.6441.
  • For EURAUD (+0.55%), we highlighted a trendline break from the 2023 lows yesterday and today’s recovery is approaching a retest. The 20-day EMA at 1.6476 may also offer resistance for the cross.
  • Similar price action for the Kiwi has seen very little movement for AUDNZD. As a reminder, the pair tested above 1.1000 on Monday for the first time since June 2023 and the subsequent drift lower may be a result of a temporarily overbought condition unwinding.