The AUD/USD pair made gains on Monday due to improved risk sentiment and Japanese intervention affecting the US Dollar. The pair traded at 0.6564 as the Asian session began on Tuesday.
The US Dollar weakened as Wall Street ended with gains and US Treasury yields fell. The Dallas Fed Manufacturing Index showed a slight decline in April, but this data was overlooked as market focus shifted to the upcoming Federal Reserve monetary policy decision on May 1.
It is expected that the Federal Reserve will maintain current interest rates after recent comments from Fed Chairman Jerome Powell. The swaps market has adjusted its rate cut expectations for the year, with futures data showing a potential 25 basis points rate cut by the end of the year.
Australia’s upcoming Retail Sales data for March is anticipated to show a slight decrease. A weaker result could push the AUD/USD lower, with the 200-day moving average serving as the initial support level. Positive Retail Sales data would support the Australian Dollar, potentially influencing the Reserve Bank of Australia’s rate decisions.
Market participants will also be watching for China’s PMI data as it could impact the AUD/USD pair, given China’s status as Australia’s largest trade partner.
From a technical perspective, the AUD/USD pair is neutrally biased but could shift upwards if buyers reclaim key levels. A breach of the 100-day moving average and April 9 high could lead to further gains, while a drop below the 50 and 200-day moving averages may signal a retracement.
Overall, the AUD/USD pair’s movements will be influenced by risk sentiment, economic data, and central bank decisions in the coming days.