- The AUD/USD price analysis shows a weak Aussie amid a declining Australian economy.
- Data on Thursday revealed that Australia’s economy lost 52,800 jobs in February.
- Fed policymakers maintained their outlook for two rate cuts this year.
The AUD/USD price analysis shows a declining Australian economy that is putting pressure on the Reserve Bank of Australia to cut interest rates. Meanwhile, the Fed maintained its cautious tone, indicating no hurry to lower borrowing costs.
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The Australian dollar remained fragile on Friday after a sharp decline in the previous session. Data on Thursday revealed that Australia’s economy lost 52,800 jobs in February. Meanwhile, economists had expected the economy to add 30,800 jobs. On the other hand, the unemployment rate held steady at 4.1%.
The Reserve Bank of Australia has just started its easing cycle this year. Downbeat employment data will put pressure on policymakers to implement more cuts to keep the economy stable. As a result, rate cut expectations rose after the jobs report.
Meanwhile, the US dollar was on solid ground after the FOMC meeting on Wednesday. Policymakers maintained their outlook for two rate cuts this year. Moreover, they maintained a cautious outlook, stating there was no rush to cut interest rates. This briefly overshadowed fears of a looming US recession.
AUD/USD key events today
Market participants do not expect any key economic releases from Australia or the US. Therefore, the price might consolidate.
AUD/USD technical price analysis: Wedge breakout signals looming reversal
On the technical side, the AUD/USD price has broken out of its bullish wedge pattern, signaling a bearish sentiment shift. Moreover, the price trades well below the 30-SMA, showing bears are in the lead. At the same time, the RSI trades below 50, indicating solid bearish momentum.
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Bears took over when the previous rally paused near the 0.6390 resistance level. They pushed the price lower and broke below the wedge support line. This breakout showed that bears were ready to reverse the trend. However, to confirm this, they must start making lower lows and highs.
At the moment, the price is approaching the 0.6275 support level. Here, it might pause and rebound to retest the recently broken wedge support before continuing lower. A break below this level would confirm a new trend as it would make a lower low. Moreover, it would clear the path to the 0.6200 support level.
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