The Chicago Fed National Activity Index is predicted to decrease by 0.9% in February, following a 0.3% decline in January. Meanwhile, economists expect the Dallas Fed Manufacturing Index to improve from -11.3 to -8.0 in March. The focus will also be on the US housing sector, which is seen as a key indicator of the overall economy. A stronger housing market could boost consumer confidence and spending, leading to demand-driven inflation and potentially influencing the Federal Reserve’s interest rate decisions.
Economists are forecasting a 3.0% growth in new home sales for February, building on the 1.5% increase seen in January. Additionally, speeches from FOMC members Raphael Bostic and Lisa Cook could impact market sentiment, especially if they take a less dovish stance on the Fed’s future interest rate path.
Inflation data from Australia and the US will likely influence short-term currency pair movements, with higher inflation in Australia potentially leading to a Reserve Bank of Australia rate hike and rising inflation in the US potentially leading to a divergence in monetary policy favoring the US dollar.
Looking at AUD/USD price action on the daily chart, the currency pair is currently below both its 50-day and 200-day Exponential Moving Averages (EMAs), indicating a bearish trend. However, if it moves back above its 50-day EMA, it could signal a potential rally towards key resistance levels.
Investors should monitor both the Chinese economy and the US economic calendar for any developments that could impact AUD/USD exchange rates. While RSI suggests a bearish outlook for this currency pair with readings below $0.64582 support level potentially leading to oversold conditions
