Australian Dollar depreciated after the Fed’s ruling out of the rate cut in March.

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for FREE REGISTER to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level1)]

• Australian Dollar depreciated after the Fed’s ruling out of the rate cut in March.
• Australia’s Business Confidence (QoQ) decreased to -6 in the fourth quarter from the -1 prior.
• The weak Aussie quarterly inflation report strengthens the speculation of two quarter-point reductions in 2024.
• US Dollar faced challenges due to the disappointing US ADP Employment Change.

The Australian Dollar (AUD) attempts to retrace its recent losses on Thursday. However, the AUD/USD pair witnessed a decrease in the preceding session following Federal Reserve (Fed) Chairman Jerome Powell’s announcement. Powell ruled out the possibility of a rate cut in the upcoming March meeting, a decision widely anticipated after the Fed chose to maintain current interest rates. He emphasized the persistence of elevated inflation and highlighted the robust expansion of economic activity.

Australia’s Dollar might face downward pressure, with bond traders increasing their expectations of early interest rate cuts by the Reserve Bank of Australia (RBA) following an unexpectedly weak quarterly inflation report. Despite this, the RBA is anticipated to almost certainly maintain the cash rate at 4.35% during its February meeting. Future markets are fully pricing in two quarter-point reductions in 2024, with the initial adjustment expected in August.

National Australia Bank’s Business Confidence (QoQ) decreased to -6 in the fourth quarter from the previous decrease of -1. Building Permits (MoM) declined by 9.5% against the expected growth of 1.1% in December.

The US Dollar Index (DXY) faced losses following disappointing US employment figures but managed to recover ground after Fed Chair Powell made hawkish comments on Wednesday. The rise in US Treasury yields provides additional support for the US Dollar (USD). Furthermore, increased risk aversion stemming from heightened tensions in the Middle East could contribute to bolstering the Greenback. This, in turn, poses a challenge for the AUD/USD pair.

The US ADP Employment Change reported 107K, falling short of the expected 145K in January, with the previous reading at 158K in December. Thursday will see attention on US Initial Jobless Claims, Nonfarm Productivity, and ISM Manufacturing PMI.

The Australian Dollar trades around 0.6570 on Thursday, hovering above the weekly low of 0.6551, which coincides with a significant support level at 0.6550. A breach of this support might prompt a retest of January’s low at 0.6524. On the upside, the AUD/USD pair could face initial resistance at the psychological level of 0.6600, in conjunction with the 23.6% Fibonacci retracement level at 0.6606. A successful breakthrough above the latter may lead the pair toward testing the 21-day Exponential Moving Average (EMA) at 0.6617, followed by a crucial resistance level at 0.6650.

[/s2If]

The NEHCAP currently runs the following trading systems for clients. They can be bought and run on your funds.

The system is trading live: LIVE ACCOUNT TRACKING
Contact Us: Contact
The HFT_FIX can be run free for 2 weeks on any broker with a ECN. Apply for a free trial
Join Our Telegram Group