AUD/USD analysis on February 4, 2025
Against the background of the instability of the US dollar, the AUD/USD pair holds positions above the lows of last year - around 0.6199. The Australian currency remains in the neutral zone, as the latest macroeconomic statistics do not give clear signals for the strengthening of the AUD.
In December, an increase in the total number of permits for the construction of residential buildings was recorded. The indicator rose from -3.4% to 0.7% to 15,174 thousand. However, permits for the construction of private houses decreased by 3.0%, amounting to 8,715 thousand. The total cost of approved residential buildings decreased by 0.9% to 8.33 billion Australian dollars, while the cost of non-residential buildings, on the contrary, increased by 9.7% to 6.62 billion Australian dollars.
Household expenses increased by 0.4% month-on-month and by 1.4% year-on-year. An important positive factor was the return of the index of business activity in the manufacturing sector above the critical mark of 50 points — the indicator rose from 47.8 to 50.2 points, which indicates a slight improvement in economic activity. However, the sustainability of this trend is questionable, especially given the new trade barriers that could negatively affect Australian exports. In this regard, analysts expect that in February the Reserve Bank of Australia (RBA) may decide to reduce the interest rate by 25 basis points.
Pressure factors on the US dollar
The US dollar index adjusted after strong growth at the beginning of the week and returned to Monday's levels around 108.60. The reason for the rollback was the US decision to temporarily postpone the introduction of 25% tariffs on imports from Mexico and Canada. This happened after the Mexican authorities agreed to send 10,000 National Guard soldiers to strengthen border controls to curb illegal migration and the smuggling of illegal substances. Some agreements have also been reached with Canada.
Data on the number of open vacancies in the United States (JOLTS) for December, which will be published today at 17:00 (GMT+2), may have an additional impact on the market. The figure is projected to decrease from 8.098 million to 8.010 million, which may signal a gradual cooling of the labor market.
AUD/USD technical analysis
A descending channel with dynamic boundaries of 0.6260–0.6000 is forming on the daily chart.
Technical indicators confirm the predominance of bearish sentiment. The fast moving averages of the Alligator indicator are directed downwards, increasing the discrepancy with the signal line. The Awesome Oscillator (AO) indicator has returned to the negative zone, which reinforces the sell signal.
Trading recommendations
• It is recommended to consider sales after a confident breakdown of the 0.6150 level downwards with a target of 0.6000. The protective stop loss is 0.6220.
• Purchases can be opened when the price is fixed above 0.6260 with a target of 0.6400. The stop loss is 0.6200.