The AUD/USD currency pair rebounded toward the 0.7190 level on Thursday, recovering losses from the previous session. This move was driven by robust Chinese business activity data and a weaker US Dollar, both of which supported the Australian Dollar [1]. Specifically, the April Chinese NBS Manufacturing Purchasing Managers Index (PMI) rose to 50.3, surpassing the expected 50.1, and the RatingDog manufacturing PMI also exceeded forecasts. However, the NBS non-Manufacturing PMI came in below expectations at 49.4, compared to the forecasted 49.9. As China is a key trading partner for Australia, the better-than-expected manufacturing data provided a positive catalyst for the Aussie [1].
In the United States, Initial Jobless Claims fell to 189,000, marking the lowest level in nearly 60 years and defying expectations of a stable reading around 215,000. The PCE Price Index, the Federal Reserve's preferred inflation measure, increased to 3.5% year over year in March from 2.8% in February, in line with market forecasts. Despite the strong labor market data, preliminary Q1 GDP growth was reported at 2%, which was below the anticipated 2.3%, dampening enthusiasm for the US Dollar [1].
Looking ahead, the Reserve Bank of Australia (RBA) is scheduled to meet on May 5. Investors are anticipating the possibility of a third consecutive interest rate hike by the RBA, citing persistently high inflation as a driving factor [1].
From a technical perspective, AUD/USD was trading at 0.7183, maintaining a modest bullish bias as it remained above the 20-period and 100-period Simple Moving Averages (SMAs) at 0.7163 and 0.7134, respectively. The Relative Strength Index (RSI) was near 59, indicating firm but not excessive buying pressure. Immediate resistance was identified at 0.7184, with a more significant barrier at 0.7192, while support levels were seen at 0.7167, 0.7163, 0.7145, and 0.7134 [1].
CONCLUSION
The AUD/USD's rise was fueled by stronger-than-expected Chinese manufacturing data and a weaker US Dollar, with investors eyeing the upcoming RBA meeting for potential policy action. Market sentiment remains cautiously optimistic, supported by technical indicators and expectations of further rate hikes in Australia.