US Dollar Forecast: AUD/USD Holds Above 50-Day SMA Despite Sticky US CPI
US Dollar Outlook: AUD/USD
AUD/USD continues to pullback from the monthly high (0.6668) as the update to the US Consumer Price Index (CPI) reveals sticky inflation, but the exchange rate may attempt to further retrace the decline from the January high (0.6839) as long as it holds above the 50-Day SMA (0.6576).
US Dollar Forecast: AUD/USD Holds Above 50-Day SMA Despite Sticky US CPI
Keep in mind, AUD/USD pushed above the moving average during the previous week to clear the February high (0.6610), and the break above last month’s range may signal a potential shift in the near-term trend amid the lack of response to the negative slope in the indicator.
However, AUD/USD may struggle to retain the advance from the monthly low (0.6477) as it snaps the series of higher highs and lows from last week, and data prints coming out of the US may continue to sway the exchange rate as Federal Reserve Chairman Jerome Powell tells US lawmakers that ‘it will likely be appropriate to begin dialing back policy restraint at some point this year.’
Join David Song for the Weekly Fundamental Market Outlook webinar. Register Here
US Economic Calendar
The update to the US Retail Sales report may generate a bullish reaction in the Greenback as private sector consumption is projected to increase 0.8% in February, and a rebound in household spending may encourage the Federal Open Market Committee (FOMC) to keep US interest rates higher for longer in an effort to further combat inflation.
At the same time, a weaker-than-expected US Retail Sales report may produce headwinds for the Greenback as it puts pressure on the Fed to pursue a less restrictive policy, and a dismal development may curb the recent weakness in AUD/USD as Chairman Powell and Co. forecast lower interest rates for 2024.
With that said, the recent pullback in AUD/USD may end up short-lived amid the lack of response to the negative slope in the 50-Day SMA (0.6576), but the exchange rate may struggle to retain the advance from the monthly low (0.6477) if it fails to hold above the moving average.
AUD/USD Price Chart – Daily
Chart Prepared by David Song, Strategist; AUD/USD on TradingView
- AUD/USD pushed above the 50-Day SMA (0.6576) to clear the February range, and the exchange rate may attempt to further retrace the decline from the January high (0.6839) as long as it holds above the moving average.
- Need a break/close above 0.6740 (38.2% Fibonacci retracement) to bring the 0.6810 (23.6% Fibonacci extension) to 0.6820 (23.6% Fibonacci retracement) region on the radar, but AUD/USD may struggle to hold above the moving average if it closes below the 0.6590 (38.2% Fibonacci extension) to 0.6600 (23.6% Fibonacci retracement) area.
- Next region of interest comes in around 0.6510 (38.2% Fibonacci retracement) to 0.6520 (23.6% Fibonacci retracement), with a breach below the monthly low (0.6477) opening up the February low (0.6443).
Additional Market Outlooks
US Dollar Forecast: USD/CAD No Longer Trades in Ascending Channel
US Dollar Forecast: GBP/USD Rally Eyes December High
--- Written by David Song, Strategist
Follow 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.
FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.
GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.
© FOREX.COM 2025