Australian Dollar Forecast: Aussie Trade Data, US Services PMI, and $0.69500

Aussie Trade Data in Focus

Trade data from Australia will likely impact buyer demand for the AUD/USD on Thursday, October 3. Economists expect the trade surplus to narrow from A$6.009 billion in July to A$5.500 billion in August.

Weaker trade figures could support expectations of a Q4 2024 RBA rate cut. Australia has a trade-to-GDP ratio of over 50%, with 20% of its workforce in trade-related jobs.

Weaker demand may negatively impact the Australian labor market, possibly slowing wage growth and consumer spending. A pullback in consumer spending could dampen demand-driven inflation, allowing the RBA to cut interest rates to ease pressure on households.

In the latest RBA press conference, RBA Governor Michele Bullock warned,

“Weaker than expected momentum in H1 2024 suggests there is some risk that consumption could remain more subdued than expected.”

Signals of subdued consumption, following August’s decline in inflation to 2.7%, could raise bets on a Q4 RBA rate cut. A more dovish RBA rate path may send the AUD/USD pair below $0.68500.

Expert Views on the RBA Rate Path

AMP’s Head of Investment Strategy and Chief Economist, Shane Oliver, commented on the recent Aussie CPI data, stating,

“Our base case remains for a first RBA cut in Feb (after Q3 & Q4 CPIs confirm falling inflation, but the chance of an earlier move is high.”

US Economic Calendar: Services PMI and Jobless Claims in Focus

Later in the session, traders should consider the US labor market and services sector data.

Economists expect initial jobless claims to rise from 218k (week ending September 21) to 220k (week ending September 28). A slight increase in claims would likely shift the focus to the ISM Services PMI.

Economists forecast the ISM Services PMI to increase from 51.5 in August to 51.6 in September. An unexpected drop below 50.0 could retrigger fears of a hard landing and bets on a 50-basis point Fed rate cut, which may push the AUD/USD toward $0.69500.

Short-Term Forecast for AUD/USD

Near-term AUD/USD trends will likely hinge on the Aussie trade data and the US ISM Services PMI. Weaker-than-expected services sector data could signal a more dovish Fed rate path. A narrowing in the interest rate differential between the US and Australia could drive the AUD/USD toward $0.69500.

While Aussie trade terms are crucial, the RBA focus remains on the labor market, consumption, and inflation.

Investors should closely monitor central bank signals and economic indicators, which could influence AUD/USD trends. Traders should monitor real-time data, news updates, and expert commentary to adjust their trading strategies accordingly.

AUD/USD Technical Analysis

Daily Chart: AUD/USD Breakout Intact

The AUD/USD hovers well above the 50-day and 200-day EMAs, affirming bullish price signals.

A break above the September 30 high of $0.69411 could support a move toward the $0.70 level. Furthermore, a return to $0.70 may give the bulls a run at the $0.70500 level.

Traders should consider the Aussie trade data, US ISM Services PMI, and central bank commentary, which may influence AUD/USD price movements.

Conversely, a fall through $0.68500 could bring the $0.68006 support level into play.

With a 14-period Daily RSI reading of 62.04, the Aussie dollar could break above the $0.69500 level before entering overbought territory.