AUD/USD Breaches March Low to Bring November Low on Radar
AUD/USD Outlook
AUD/USD registers a fresh yearly low (0.6499) after failing to trade back above the 50-Day SMA (0.6679), and the exchange rate may give back the rebound from the November 2022 low (0.6272) as it snaps the range bound price action from earlier this week.
AUD/USD Breaches March Low to Bring November Low on Radar
AUD/USD takes out the March low (0.6565) as it carves a series of lower highs and lows, and data prints coming out of Australia may do little to curb the decline in the exchange rate should the Retail Sales report reflect a slowing economy.
Join David Song for the Weekly Fundamental Market Outlook webinar. Register Here
Retail spending in Australia is expected to increase a mere 0.2% in April after expanding 0.4% the month prior, and a slowdown in household consumption may push the Reserve Bank of Australia (RBA) to the sidelines as the central bank warns that there are ‘still significant uncertainties surrounding the economic outlook, particularly for household consumption.’
Nevertheless, a better-than-expected Retail Sales report may curb the recent decline in AUD/USD as it puts pressure on the RBA to pursue a more restrictive policy, and it remains to be seen if Governor Philip Lowe and Co. will deliver another 25bp rate hike at the next meeting on June 6 as the board acknowledges that ‘further increases in interest rates may still be required.’
Until then, developments coming out of the US may also sway AUD/USD as the Federal Reserve keeps the door open to further embark on its hiking-cycle, and it seems as though the Federal Open Market Committee (FOMC) will take additional steps to combat inflation as Governor Christopher Waller warns that ‘I do not support stopping rate hikes unless we get clear evidence that inflation is moving down towards our 2 percent objective.’
Waller went onto say that ‘fighting inflation continues to be my priority’ while speaking at the 2023 Santa Barbara County Economic Summit, and the comments suggest Fed officials will continue to tame speculation for a rate cut this year especially as the labor market remains tight.
Source: CME
In turn, AUD/USD may face headwinds over the remainder of the month as the CME FedWatch Tool now reflects a greater than 40% chance for another 25bp Fed rate hike, and the exchange rate may continue to trade to fresh yearly lows as it carves a series of lower highs and lows following the failed attempts to trade back above the 50-Day SMA (0.6680).
With that said, AUD/USD may continue to pare the advance from the November 2022 low (0.6272) as it clears the March low (0.6565), and a further decline in the exchange rate may push the Relative Strength Index (RSI) towards oversold territory as it sits at its lowest level since March.
Australian Dollar Price Chart – AUD/USD Daily
Chart Prepared by David Song, Strategist; AUD/USD on TradingView
- AUD/USD clears the March low (0.6565) following the failed attempt to push back above the 50-Day SMA (0.6679), and the exchange rate may continue to trade to fresh yearly lows as it carves a series of lower highs and lows.
- A close below the 0.6510 (38.2% Fibonacci retracement) to 0.6550 (61.8% Fibonacci retracement) region may push AUD/USD towards 0.6380 (78.6% Fibonacci retracement), with the next area of interest coming in around the November 2022 low (0.6272).
- A further decline in AUD/USD may push the Relative Strength Index (RSI) towards oversold territory, but the oscillator may show the bearish momentum abating if it fails to push below 30 like the price action from earlier this year.
- Need a move back above the 0.6510 (38.2% Fibonacci retracement) to 0.6550 (61.8% Fibonacci retracement) region for AUD/USD to negate the bearish price series, with the next topside area of interest coming in around the 0.6600 (23.6% Fibonacci retracement).
Additional Resources
USD/CAD Rate Climbs Above 50-Day SMA to Eye Monthly High
Gold Price Forecast: Bullion Susceptible to Test of April Low
--- Written by David Song, Strategist
Follow me on Twitter at @DavidJSong
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
Contracts for Difference (CFDs) are not available to US residents.
FOREX.com is a trading name of GAIN Capital - FOREX.com Canada Limited, 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA is a member of the Canadian Investment Regulatory Organization and Member of the Canadian Investor Protection Fund. GAIN Capital – FOREX.com Canada Limited is a wholly-owned subsidiary of Stonex Group Inc.
Complaints are taken very seriously at FOREX.com. You can view our complaints procedure here.
© FOREX.COM 2025