Forex Market: AUD/USD daily trading forecast

Written by Miroslav Marinov

Miroslav Marinov, a financial news editor at TradingPedia, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market, as currently his focus is set on the major currencies of eight developed nations worldwide.

, | Updated: October 30, 2024

Friday’s trade saw AUD/USD within the range of 0.7247-0.7341. The pair closed at 0.7261, losing 0.93% on a daily basis, while marking its first drop in the past three trading days. In weekly terms, AUD/USD lost 1.02%, following a 4.09% advance during the week ended on October 11th. It has been the sharpest weekly decline since the week ended on September 27th, when the pair depreciated 2.30%.

At 7:07 GMT today AUD/USD was gaining 0.35% for the day to trade at 0.7291. The pair touched a daily high at 0.7296 at 7:04 GMT.

Today AUD/USD trading may be influenced by the macroeconomic releases listed below.

Fundamentals

United States

NAHB Housing Market Index

The National Association of Home Builders (NAHB) Housing Market Index probably remained stable in October at a reading of 62.0, according to market expectations. If so, this would be the 15th consecutive month, when the gauge stood in the area above 50.0, while also being the highest level since November 2005. The indicator is based on a monthly survey in regard to current home sales and expected sales in the coming six months. Values above the key level of 50.0 indicate that housing market conditions are good. Therefore, higher-than-projected readings would provide support to the US dollar. The official reading is scheduled for release at 14:00 GMT.

Correlation with other Majors

Taking into account the week ended on October 18th and the daily closing levels of the major currency pairs, we come to the following conclusions in regard to the strength of relationship:

AUD/USD to NZD/USD (0.2896, or weak)
AUD/USD to GBP/USD (0.2895, or weak)
AUD/USD to USD/CHF (0.2112, or weak)
AUD/USD to USD/JPY (0.0301, or very weak)
AUD/USD to EUR/USD (0.0012, or very weak)
AUD/USD to USD/CAD (-0.2312, or weak)

1. During the examined period AUD/USD showed a weak correlation with NZD/USD, GBP/USD, USD/CHF and USD/CAD.

2. AUD/USD moved almost independently compared to USD/JPY and EUR/USD during the past week.

Bond Yield Spread

The yield on Australia’s 2-year government bonds went as high as 1.833% on October 16th, after which it slid to 1.819% at the close to lose 1.3 basis points (0.013 percentage point) compared to October 15th. It has been the fourth drop in the past five trading days.

The yield on US 2-year government bonds climbed as high as 0.617% on October 16th, or the highest level since October 14th (0.617%), after which it fell to 0.613% at the close to gain 1.2 basis points (0.012 percentage point) compared to October 15th. It has been a second straight trading day of increase.

The spread between 2-year Australian and 2-year US bond yields, which reflects the flow of funds in a short term, shrank to 1.206% on October 16th from 1.231% during the prior day. The October 16th yield spread has been the lowest one since September 29th, when the difference was 1.176%.

Meanwhile, the yield on Australia’s 10-year government bonds soared as high as 2.639% on October 16th, after which it slid to 2.628% at the close to lose 0.009 percentage point compared to October 15th. It has been the fourth drop in the past five trading days.

The yield on US 10-year government bonds climbed as high as 2.037% on October 16th, or the highest level since October 14th (2.049%), after which it slipped to 2.035% at the close to add 1.6 basis points (0.016 percentage point) compared to October 15th. It has been a second straight trading day of increase.

The spread between 10-year Australian and 10-year US bond yields narrowed to 0.593% on October 16th from 0.620% during the prior day. The October 16th yield difference has been the lowest one since October 14th, when the spread was 0.590%.