AUD/USD forecast ahead of Australia jobs and US retail sales data

By:
on Sep 14, 2022
  • The AUD/USD price has been in a strong bearish trend lately.
  • The sell-off intensified after the recent US inflation data.
  • Focus shifts to the upcoming Australia jobs and US retail sales data.

The Australian dollar (AUD/USD) plummeted to the lowest level in more than a week amid a persistent strong US dollar. It dropped to a low of 0.6700, which was about 3% below the highest point this week.

Australia jobs data and US retail sales data

The AUD/USD plunged on Wednesday as investors focused on the soaring American inflation data. Data published on Wednesday revealed that the headline producer price index (PPI) dropped from 9.8% in July to 8.7% in August. 

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Excluding the volatile food and energy prices, the PPI dropped from 7.7% to 7.3%. This decline was smaller than the median estimate of 7.1%. On a month-on-month basis, core PPI rose from 0.3% to 0.4%.

These numbers came a day after the US published strong consumer inflation data. According to the Bureau of Labor Statistics (BLS), the headline consumer inflation jumped by 0.1% in August. Core inflation also kept rising, as we wrote in this report.

The next key catalyst for the AUD/USD pair will be the upcoming Australian jobs numbers scheduled for Thursday. Economists polled by Reuters expect the data to show that the Australian economy added 35k jobs in August after it shed over 40k jobs in the previous month.

They also expect that the country’s unemployment rate remained unchanged at 3.4% in August. Additionally, analysts expect that the participation rate rose from 66.4% to 66.6%. These numbers will provide more information about the state of the Australian economy.

Last week, the Reserve Bank of Australia (RBA) decided to hike interest rates by another 0.50% as it continued fighting the soaring inflation.

The AUD/USD price will also react to the latest US retail sales data. Analysts expect that retail sales rose by 0.2% in August as inflation eased. Core saes are expected to have dropped from 0.4% to 0.1%.

AUD/USD forecast

AUD/USD

The four-hour chart shows that the AUD/USD pair has been in a strong bearish trend in the past few weeks. This sell-off continued after the latest US inflation data. As it fell, it moved below all moving averages. It also fell below the important support level at 0.6840. The pair has moved below the neckline of the head and shoulders pattern.

Therefore, it will likely continue falling as sellers target the next key support level at 0.6600. A move above the resistance at 0.6800 will invalidate the bearish view.

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