Aussie Slides After U.S PCE Data, Tariffs

Fundamental Analysis

* PCE Punch: The Australian dollar slipped to a three-week low against the U.S. dollar following the release of U.S. PCE data and new tariff announcements from President Donald Trump. Trump’s proposed 10% tariff on Chinese goods adds to existing duties, heightening concerns over potential retaliation from China, Australia’s largest trading partner. Meanwhile, tariffs on Mexican and Canadian goods are set to take effect as early as next week. On the economic front, the U.S. Bureau of Economic Analysis reported that annual inflation, measured by the Personal Consumption Expenditures (PCE) Price Index, declined to 2.5% in January from 2.6% in December. Additionally, Australian Private Capital Expenditure unexpectedly contracted by 0.2% quarter-on-quarter in Q4 2024, missing the forecasted 0.8% growth, signaling weaker investment activity and dampening confidence in the Australian economy.

Technical Analysis

*Technical Breakout: AUDUSD was traded lower while currently testing the support level 0.62200. MACD which illustrate bearish momentum signal with the formation of death cross suggest the pair to likely extend its losses.

* Resistance and Support: : If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards the level 0.60650 after it breaks below the support level 0.62200. Conversely, a potential reversal is also to be expected and the price could head back towards the level 0.638000.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Looking ahead, traders will closely monitor key economic data this week, including the ISM Manufacturing PMI, ADP Non-Farm Employment Change, and Non-Farm Payrolls, which could play a crucial role in shaping market direction.

Know how to manage trading risks with risk management strategies.

Monitoring

Stay updated on US and Australian data, global market updates, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

Grab the trading opportunity and dive into the action risk-free with a free demo account. It is the perfect way to hone your skills and explore the exciting world of trading!

Open Your Free Demo Account And Start Trading Risk-Free

Join Now

Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.