Forex Market: AUD/USD trading outlook for May 23rd

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 0.7212-0.7249. The pair closed at 0.7223, inching down 0.07% on a daily basis. It has been the 13th drop in the past 22 trading days and also a third consecutive one. In weekly terms, AUD/USD lost 0.62% of its value during the current week. It has been the 11th drop in the past 20 weeks and also a fifth consecutive one. AUD/USD has gone down 5.00% so far during the current month, following a 0.72% slump in April.

On Monday (May 23rd) AUD/USD trading may be influenced by the following macroeconomic reports and other events as listed below.

Fundamentals

United States

Manufacturing PMI by Markit – preliminary reading

Manufacturing activity in the United States probably was little changed in May, with the corresponding preliminary Purchasing Managers’ Index coming in at a reading of 51.0, according to market expectations, up from a final seasonally adjusted reading of 50.8 in April. The latter has been the lowest PMI level in more than 3 years.

Values above the key level of 50.0 indicate predominant optimism (expanding activity) among survey respondents. In case the flash manufacturing PMI showed a worse-than-anticipated performance in May, this would have a moderate bearish effect on the US dollar. The preliminary PMI reading by Markit Economics is due out at 13:45 GMT.

Fed speakers

At 10:15 GMT on Monday the Fed President for St. Louis, James Bullard, is expected to take a statement, followed by the Fed President for San Francisco and also a FOMC member, John Williams at 12:00 GMT. Additionally, at 22:30 GMT the Federal Reserve President for Philadelphia and also a FOMC member, Patrick Harker is to speak. Their remarks will be closely watched by market players for hints over the Banks monetary policy stance in the upcoming months and, thus, may lead to moderate volatility of the currency pairs containing the US dollar.

Correlation with other Majors

Taking into account the business week ended on May 20th and the daily closing levels of the currency pairs involved, we come to the following conclusions in regard to the strength of relationship:

AUD/USD to NZD/USD (0.9680, or very strong)
AUD/USD to EUR/USD (0.9362, or very strong)
AUD/USD to GBP/USD (-0.7458, or strong)
AUD/USD to USD/CHF (-0.8860, or very strong)
AUD/USD to USD/CAD (-0.9198, or very strong)
AUD/USD to USD/JPY (-0.9271, or very strong)

1. During the examined period AUD/USD moved almost equally in one and the same direction with EUR/USD and NZD/USD. This relationship has been the most pronounced between AUD/USD and NZD/USD.

2. AUD/USD moved strongly in the opposite direction compared to GBP/USD during the week.

3. AUD/USD moved almost equally in the opposite direction compared to USD/CHF, USD/CAD and USD/JPY during the period in question. This relationship has been the most pronounced between AUD/USD and USD/JPY.