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   “¢   US durable goods orders for March surpass even the most optimistic estimates.
   “¢   The USD clings to gains near 2-year tops, though lacked strong follow-through.
   “¢   A larger than expected jump in initial jobless claims seemed to cap USD gains.

The AUD/USD pair held on to its offered tone and weakened farther below the key 0.7000 psychological mark, or near four-month lows after better than expected US durable goods orders data.  

The already stronger US Dollar got an additional boost, rising to the highest level in nearly two years (since May 2017) after data released from the US showed a sharp rebound in the durable goods orders. In fact, orders for capital goods jumped 2.7% m/m as against 1.1% decline recorded in the previous month and 0.8% rise expected.  

Adding to the positive headline reading, core durable goods orders – excluding transportation items, also surpassed expectations and edged up 0.4% m/m rate during the reported month as against 0.2% rise expected, though was partly offset by an unexpected jump in the initial weekly jobless claims.

Against the backdrop of growing bets that the RBA might be forced to cut interest rates as early as in May, broad-based USD strength largely offset the recent optimism over a possible US-China trade deal and did little to lend any support to the China-proxy Australian Dollar or ease the prevalent bearish pressure.  

It would now be interesting to see if the pair is able to find any respite at lower levels or continues with its bearish trajectory, despite highly oversold conditions, as market participants start repositioning for Friday’s key release of the advance US Q1 GDP report.

Technical levels to watch