AUD/USD Price Forecast: Bulls eye 0.7100 after US Retail Sales miss

The Australian Dollar (AUD) rose on Friday following disappointing US Retail Sales, suggesting the Federal Reserve may refrain from raising interest rates as the economy appears to be experiencing mild weakness. The AUD/USD traded at 0.7083, up 0.34%. While the daily chart indicates bullish momentum, traders have yet to decisively break through the January 29 high of 0.7094, potentially paving the way for further upward movement.

This bullish shift began around mid-July, as shown by the Relative Strength Index (RSI). For the AUD/USD pair to reach bullish territory, it must first reclaim the June 1 peak at 0.7190. If this occurs, the next resistance level would be at 0.7100, followed by 0.7200. Conversely, the 100-day Simple Moving Average (SMA) at 0.7058 currently acts as the initial support.

Clearing this level would open the path to the 50-day SMA at 0.6991, then the 200-day SMA at 0.6937. Significant influences on the AUD include Australia's Reserve Bank of Australia (RBA) interest rates, global factors like China's economy and Iron Ore prices, domestic economic indicators (growth rate, Trade Balance, inflation), and overall market sentiment (risk-on or risk-off).

The RBA, aiming to maintain a stable 2-3% inflation rate, raises or lowers interest rates accordingly. When China's economy thrives, it increases demand for Australian resources, bolstering the AUD. Conversely, a weakened Chinese economy could weaken the AUD. The price of Iron Ore, Australia's biggest export, can also impact the AUD; higher prices typically lead to a stronger AUD, while lower prices can result in a weaker one.

The country's Trade Balance, which records the difference between exported and imported goods, is another vital factor. A positive Trade Balance strengthens the AUD, while a negative balance weakens it. Analysts note that Gold has rebounded towards the $4,400 mark, driven by weakening US Dollar expectations and ongoing Middle East tensions.