US Economic Calendar: Employment Costs and Consumer Confidence
Later in the session, employment cost – wages and the CB Consumer Confidence will be in focus.
Economists forecast employment cost – wages to increase by 0.9% quarter-on-quarter in Q1 2024. In Q4 2023, employment cost – wages rose by 0.9%. Higher-than-expected wages could further affect investor expectations of a September Fed rate cut.
Upward trends in wages could increase disposable income and consumer spending. A more hawkish Fed rate path could raise borrowing costs and reduce disposable income, dampening demand-driven inflation.
However, the CB Consumer Confidence Index could influence the Fed rate path more. Economists forecast the Index to decline from 104.7 to 104.0 in April. Downward trends in consumer confidence could signal a pullback in consumer spending and softer inflation.
Other US economic indicators include the Chicago PMI and house price data. However, wage data and consumer confidence figures will likely impact the AUD/USD more.
Short-Term Forecast
Near-term AUD/USD trends remain hinged on Australian retail sales figures, US labor market numbers, and the FOMC press conference. Better-than-expected Australian retail sales could raise investor bets on an RBA rate hike. Upbeat retail sales figures could tilt monetary policy divergence toward the Aussie dollar.
Conversely, better-than-expected US data could reduce the number of 2024 Fed rate cuts. However, the markets are not considering a Fed rate hike.
AUD/USD Price Action
Daily Chart
The AUD/USD remained above the 50-day EMA while hovering below the 200-day EMA, affirming bullish near-term but bearish longer-term price signals.
An Aussie dollar breakout from the 200-day EMA and the $0.65760 resistance level would give the bulls a run at the $0.66 handle.
Aussie retail sales, manufacturing PMI numbers from China, and the US economic calendar need consideration.
Conversely, an AUD/USD break below the $0.65500 handle could signal a fall to the 50-day EMA. A drop below the 50-day EMA could give the bears a run at the $0.64582 support level.
Given a 14-period Daily RSI reading of 57.46, the AUD/USD could return to the $0.66 handle before entering overbought territory.
