AUD/USD showed moderate growth, developing an upward momentum on Wednesday, moving away from the lows on April 23. Currently, the pair is testing the 0.6535 level for an upward breakout, and traders are analyzing the April Australian foreign trade report.
According to the data, Australian exports increased by 0.1%, while imports decreased from 4.5% to 4.2%. As a result, the balance sheet surplus decreased from AUD 6.591 billion to AUD 5.024 billion, slightly below the expected AUD 7.370 billion. Meanwhile, retail sales fell by 0.4% in March, showing the lowest annual growth except during the COVID-19 pandemic. These data indicate weak consumer demand and an increase in household debt obligations in the context of the "hawkish" policy of the Reserve Bank of Australia (RBA). Earlier, traders drew attention to business activity in the country: the manufacturing index fell from 49.9 to 49.6, the production index from -7.0 to -13.9, and the construction index from -12.9 to -25.6. Business activity in various sectors of the Australian economy continues to decline.
Today, market participants are waiting for data from the United States on applications for unemployment benefits. It is expected that during the week the number of initial applications will grow from 207.0 thousand to 212.0 thousand, and the number of repeat applications will remain close to the previous 1.781 million.
Tomorrow, data on business activity in the service sector will be published in Australia, and data on the labor market in the United States. The growth of new jobs outside the agricultural sector is projected to slow down from 303.0 thousand to 243.0 thousand.
On the daily chart, the Bollinger Band indicator indicates an uptrend. The MACD indicator is growing and gives a weak buy signal, while the stochastic, on the contrary, is decreasing, indicating that the instrument is oversold in the short term.
Purchases can be opened after the breakdown and consolidation of the pair above the level of 0.6586 with a target of 0.6661. We will place the stop loss at 0.6540.
A rebound from the 0.6586 level and a subsequent breakdown of the 0.6545 level down may be a signal for the formation of short positions with a take profit of 0.6450. In this case, we set the protective stop loss at 0.6586.