AUDUSD likely to rise further

The Australian dollar may benefit from the forecasted rise in unemployment and a decline in the US PMI. Find out more in our analysis dated 22 August 2024.

AUDUSD forecast: key trading points

• Australia’s manufacturing PMI: previously at 47.5, currently at 48.7
• Australia’s services PMI: previously at 50.4, currently at 52.2
• US services PMI: previously at 55.0, projected at 54.0
• US initial jobless claims: previously at 227,000, projected at 232,000
• AUDUSD forecast for 22 August 2024: 0.6764, 0.6555, 0.6416, and 0.6200

Fundamental analysis

The Purchasing Managers’ Index reflects a country’s level of manufacturing activity over the previous period. A reading above 50.0 indicates economic growth, while a reading below 50.0 signals a contraction. Australia’s current manufacturing PMI is 1.2 points higher than the previous reading. Although theoretically this increase could be considered a positive sign for the Australian dollar, the index remains below the 50.0 level, which is a negative factor.

Australia’s services PMI also rose from the previous reading, coming in at 52.2 points. Overall, the fundamental analysis of Australia’s data for 22 August 2024 is positive for the AUDUSD rate.

The US services PMI is projected to decrease to 54.0 from the previous reading.

According to the forecast, US initial jobless claims are expected to increase to 232,000 from 227,000 over the past week.

Overall, today’s AUDUSD forecast may be considered favourable for the Australian dollar. However, it is essential to note that the US will release data today, which could affect the market situation.

AUDUSD technical analysis

The AUDUSD H4 chart indicates that the market has received support at 0.6555 and is maintaining upward momentum to 0.6764. The price is expected to reach this target level today, 22 August 2024. Subsequently, a downward wave might start, aiming for 0.6555. A breakout below this level could lead to a further decline to 0.6416, with the trend potentially continuing to the local target of 0.6200.

Summary

Rising unemployment, the decline in the US PMI, and the AUDUSD technical analysis suggest that the AUDUSD rate may increase to 0.6764. Subsequently, the downtrend is expected to continue to the 0.6555, 0.6416, and 0.6200 levels.