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AUD to USD Forecast: China Trade Data in the Spotlight

By:
Bob Mason
Published: Apr 12, 2024, 00:38 GMT+00:00

Key Points:

  • On Friday, the Chinese economy will be in focus, with trade data for March in the spotlight.
  • Later in the session, consumer sentiment figures from the US will need consideration.
  • FOMC member chatter also warrants investor attention after the US inflation reports.
AUD to USD Forecast

In this article:

China: Trade Terms in Focus

On Friday, the AUD/USD is in the hands of economic indicators from China. Trade data for March will warrant investor attention.

Economists forecast exports to decline by 3.0% year-on-year after advancing by 7.1% in February. Moreover, economists expect imports to increase by 1.2% year-on-year after rising 3.5% in February. Economists predict the US dollar trade surplus to narrow from $125.16 billion to $70.20 billion.

Weaker-than-expected imports and exports would align with recent inflation figures from China. Producer and consumer prices signaled a weaker demand environment. Additionally, disappointing numbers could impact buyer demand for the Aussie dollar.

The Australian economy is trade-reliant, with a trade-to-GDP ratio above 50%. China accounts for one-third of Australian exports. Moreover, 20% of the Australian workforce is in trade-related jobs. A deteriorating macroeconomic environment could impact RBA growth forecasts and the RBA rate path.

There are no economic indicators from Australia to influence buyer appetite for the AUD/USD.

US Economic Calendar: Consumer Sentiment and Fed Speakers

On Friday, the market focus will shift to consumer sentiment numbers for April. Economists forecast the Michigan Consumer Sentiment Index to decline from 79.4 to 79.0. Lower-than-expected numbers could increase investor bets on a June Fed rate cut. A pullback in consumer confidence would affect consumer spending and dampen demand-driven inflation.

However, investors must consider the sub-components of the Index, including inflation expectations.

Beyond the numbers, FOMC member commentary also needs monitoring. FOMC members Mary Daly and Raphael Bostic are on the calendar to speak. Reactions to the recent US inflation numbers and views on the timing of interest rate cuts could move the dial.

Short-Term Forecast

Near-term AUD/USD trends will hinge on economic indicators from China and the US economic calendar. Weaker-than-expected trade data from China and an unexpected improvement in US consumer confidence could pressure the AUD/USD.

AUD/USD Price Action

Daily Chart

The AUD/USD hovered below the 50-day and 200-day EMAs, confirming the bearish price trends.

An Aussie dollar break above the $0.65500 handle would give the bulls a run at the 50-day EMA. A breakout from the 50-day EMA would support a move toward the $0.65760 resistance level and the 200-day EMA. Selling pressure may intensify at the $0.65760 resistance level. The 200-day EMA is confluent with the resistance level.

Trade data from China and the US economic calendar need consideration.

Conversely, an AUD/USD drop below the $0.65 handle could bring the $0.64582 support level into play.

Given a 14-period Daily RSI reading of 47.63, the AUD/USD could fall through the $0.64582 support level before entering oversold territory.

AUD to USD Daily Chart sends bearish price signals.
AUDUSD 120424 Daily Chart

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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