**AUD/USD Holds Firm as Traders Await Australian Trade Balance Data**
*Original reporting and analysis by FXStreet’s Aharon Abadi.*
—
The Australian Dollar (AUD) is treading cautiously against its US counterpart, with traders keeping close watch on upcoming Australian trade balance data. The AUD/USD pair has experienced volatile swings recently, responding to both domestic economic fundamentals and broader global market movements, especially signals from major central banks. As the Asian session unfolds, market participants are finely tuning their positions, awaiting new cues that could influence the currency pair’s near-term direction.
### Key Developments Influencing AUD/USD
1. **Australian Economic Indicators**
– **Trade Balance Release:**
The Australian Bureau of Statistics (ABS) is scheduled to release its latest trade balance figures. This data set is crucial in assessing the overall health of Australia’s external sector. A strong trade surplus typically gives the Aussie a boost, signifying robust export activity and stable capital inflows.
– **Exports and Imports Patterns:**
– Australia is a major exporter of iron ore, coal, and liquefied natural gas.
– Recent data from Chinese manufacturing, a primary market for Australian exports, has been mixed, with some improvements in output but lingering concerns over weak demand.
– Any surprise in the trade data, especially regarding export volumes, could cause rapid movements in AUD/USD.
– **Inflation and Retail Sales:**
The Reserve Bank of Australia (RBA) keeps a close eye on inflation and consumer spending trends for its monetary policy decisions. Recent figures have pointed to a slowdown in inflation, supporting the central bank’s current wait-and-see approach.
2. **Global Risk Sentiment and US Dollar Dynamics**
– **US Federal Reserve Policy:**
– FOMC officials have maintained a relatively hawkish tone, suggesting interest rates could remain higher for longer to ensure inflation reaches the Fed’s 2 percent target.
– Recent US economic data, including improvements in job numbers and consumer confidence, have supported this narrative.
– **China’s Economic Outlook:**
Given Australia’s trade exposure to China, optimism regarding Chinese stimulus measures and infrastructure spending can buoy the Aussie. However, persistent concerns over China’s real estate sector and debt dynamics impose downward pressure.
– **Geopolitical Tensions:**
Ongoing geopolitical issues, including the Russia-Ukraine conflict and tensions around Taiwan and the South China Sea, continue to influence risk appetite and, by extension, demand for risk-sensitive currencies like the AUD.
3. **Technical Analysis Snapshot**
– **Near-term Trends:**
The AUD/USD pair has been consolidating within a well-defined range, with immediate resistance near the 0.6700 mark and support at 0.6580.
– **Moving Averages and RSI:**
– The 50-day moving average is serving as an intermediate support level.
– The Relative Strength Index is hovering near neutral
Read more on AUD/USD trading.