Aussie Rebounds, USD "Running Out of Steam" Again?
The AUD/USD pair managed to rebound after opening the week with a bearish gap and testing a strong support area around 0.7030. From there, the Aussie attracted buyers and reclaimed 0.7100 in the Asian session, indicating that initial selling pressure was easing.
The trigger for this rebound came from a moderate weakening USD, although global sentiment remained defensive. Concerns about stagflation in the US also weighed on the dollar: Producer Price Index (PPI) data reinforced signs of stubborn inflation, while slowing growth made it difficult for the Fed to maneuver—lowering interest rates risked fueling inflation, while holding rates risked further economic pressure.
In Australia, the RBA's hawkish tone added fuel to the AUD's fire. Markets began pricing in the possibility of another rate hike in May, especially after the high January CPI. The combination of a weakening USD + AUD supported by RBA expectations gave AUD/USD reason to rebound.
However, the Aussie's rally still had its limits. Geopolitical tensions (Middle East conflict) could cause investors to refrain from investing in riskier assets like the AUD. The next focus is on the US Manufacturing ISM, followed by this week's major data releases (Australian GDP, ADP, Services ISM, and Non-Farm Payrolls), and a speech by RBA Governor Michele Bullock—all of which could trigger the next direction of the AUD/USD pair. (asd)
Source: Newsmaker.id
