AUD to USD Forecast: RBA Chart Pack, Beijing, and the US Economic Calendar

Highlights

• The AUD/USD slid by 0.75% on Tuesday, ending the session at $0.67591.
• On Wednesday, the RBA Chart Pack and Beijing will be focal points.
• Later in the session, US JOLTs Job Openings and the US ISM Manufacturing PMI also need consideration.

Tuesday Overview of the AUD/USD

The AUD/USD slid by 0.75% on Tuesday. Following a 0.23% loss on Friday, the Australian dollar ended the session at $0.67591. The Australian dollar rose to a high of $0.68390 before falling to a low of $0.67565.

RBA Chart Pack and Beijing in Focus

On Wednesday, the RBA Chart Pack will draw investor interest. The Chart Pack gives investors a summary of Australia’s macroeconomic and financial market trends. Australian growth, inflation, and the household sector are areas of interest.

In December 2023, the RBA cited household spending, rental markets, and wage growth as focal points. An improving household sector, a steady macroeconomic backdrop, and signs of a pickup in inflationary pressure would support buyer appetite for the Aussie dollar.

Away from the economic calendar, investors must also consider stimulus chatter from Beijing. China accounts for one-third of Australian exports. Stimulus measures could drive demand for Australian goods. Australia has a trade-to-GDP ratio above 50%, with 20% of the workforce in trade-related jobs. A pickup in demand would be a boon for the Australian economy and the Aussie dollar.

US Economic Calendar: JOLTs Job Openings and Manufacturing in Focus

On Wednesday, the US labor market will be in focus. Softer labor market conditions and a more marked contraction in the manufacturing sector would fuel bets on a Q1 2024 Fed rate cut.

Economists forecast JOLTs Job Openings to increase from 8.733 million to 8.850 million in November. However, economists predict JOLTs Job Quits to fall from 3.628 million to 3.610 million. A decrease in Job Quits could indicate worsening labor market conditions. The workforce is less willing to quit and find new jobs in a weaker labor market environment.

Softer labor market conditions could impact wage growth and disposable income. Downward trends in disposable income could reduce consumer spending and dampen demand-driven inflation. A softer inflation outlook would support a more dovish Fed rate path.

However, ISM Manufacturing PMI numbers also warrant investor attention. Economists forecast the ISM Manufacturing PMI to rise from 46.7 to 47.1 in December. Beyond the headline figure, prices, employment, and new orders need consideration.

The US manufacturing sector contributes less than 30% to the US economy. However, a more marked contraction may test bets on a US soft landing.

Beyond the numbers, Fed commentary also needs consideration. Comments regarding inflation, the US economy, and interest rates would move the dial.

Short-Term Forecast

Near-term AUD/USD trends remain hinged on China, the US ISM-Non-Manufacturing PMI, and the US Jobs Report. Stimulus measures from China and weaker US service sector and labor market numbers could tilt policy divergence toward the Aussie dollar.

AUD/USD Price Action

Daily Chart

The AUD/USD remained above the 50-day and 200-day EMAs, sending bullish price signals.

An AUD/USD break above the $0.68096 resistance level would support a move toward the $0.68944 resistance level.

China, the RBA Chart Pack, and the US economic calendar are in focus.

However, a fall through the $0.67286 support level would give the bears a run at sub-$0.67 support levels.

A 14-period Daily RSI reading of 58.85 suggests an AUD/USD break above the $0.68096 resistance level before entering overbought territory (typically above 70 on the RSI scale).

4-Hourly Chart

The AUD/USD sat below the 50-day EMA while holding above the 200-day EMA, sending bearish near-term but bullish longer-term price signals.

An AUD/USD break above the 50-day EMA and $0.68096 resistance level would bring the $0.68944 resistance level into play.

However, a fall through the $0.67286 support level would give the bears a run at the 200-day EMA.

The 14-period 4-Hourly RSI at 41.37 indicates an AUD/USD break below the $0.67286 support level before entering oversold territory.