Australian Dollar strengthens on market sentiment regarding the probability of no imminent RBA rate cuts.

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• Australian Dollar strengthens on market sentiment regarding the probability of no imminent RBA rate cuts.
• Australia’s ASX 200 moves higher following the overnight surge on Wall Street.
• US Dollar received upward support as mixed US PMI data indicated economic expansion.
• US Initial Jobless Claims declined to 201K, against the expected 218K and 213K prior.

The Australian Dollar (AUD) continues to move in a positive direction, influenced by the S&P/ASX 200 index moving higher following the overnight surge on Wall Street. The upbeat quarterly report from Nvidia propelled the S&P 500 and the Nasdaq Composite to new all-time closing highs.

Australian Dollar (AUD) received upward support from domestic data indicating that private sector activity returned to growth in February for the first time in five months, driven by a strong expansion in the services sector. Additionally, the Aussie Dollar benefited from market sentiment regarding the probability of no imminent rate cuts following the recent Meeting Minutes from the Reserve Bank of Australia (RBA).

The US Dollar Index (DXY) received upward support as employment data from the United States showed strength, with the US Bureau of Labor Statistics (BLS) reporting that weekly Initial Jobless Claims dropped below consensus expectations. Additionally, the mixed preliminary S&P Global Purchasing Managers Index (PMI) data indicated economic expansion, reinforcing the case for the Federal Reserve to maintain elevated interest rates for a longer duration to address inflationary pressures. Additionally, Hawkish remarks from US Federal Reserve officials, emphasizing the avoidance of interest rate cuts in the near term, could further bolster support for the US Dollar (USD).

The Australian Dollar trades around the major level at 0.6570 on Friday, which is followed by the weekly high at 0.6595 and a psychological barrier at 0.6600 level. Further resistance will be at 38.2% Fibonacci retracement level of 0.6606 aligned with February’s high at 0.6610 level. A break above the latter could support the AUD/USD pair to explore the region around the major level of 0.6650. On the downside, the immediate support appears at the 0.6550 level. A break below this major level could retest the weekly low at 0.6521 followed by the psychological support level of 0.6500.

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