AUD/USD Forecast: Aussie jumps to test 0.6800, technicals favor a break above
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get Premium without limits for only $9.99 for the first month
Access all our articles, insights, and analysts.
UNLOCK OFFERAUD/USD Current Price: 0.6793
- Australian labor market remains strong, while it appears to be softening in the US.
- AUD/USD soars amid risk appetite and weaker US Dollar.
- Short-term outlook points to more gains despite overbought indicators.
The AUD/USD rose sharply on Thursday, after accelerating to the upside during the American session on the back of risk appetite and broad-based Dollar’s weakness. The pair is at its strongest level since late February and looks set to extend gains.
The Australian Employment report came in better than expected on Thursday, showing employment increased by 53K in March, surpassing the 20K of market consensus. The Australian Bureau of Statistics also reported that the Unemployment Rate remained unchanged at 3.5%, against estimates of an increase to 3.6%.
The appreciation of the Aussie following the Australian jobs reports was limited, reflecting that despite another upbeat jobs report, the Reserve Bank of Australia (RBA) is still seen on pause in May. A better mood across financial markets also offered support to the pair. China reported an increase in exports in March of 14.8%, against expectations of a 7% slide; imports dropped by 1.4%, less than the 5% fall forecast.
The bullish breakout in AUD/USD took place during the American session when it jumped above 0.6730 following the release of US economic data. Wholesale inflation dropped more than expected in March, and Initial Jobless Claims rose above consensus to monthly highs, pointing to a softer labor market. The US Dollar tumbled after those numbers, pushing AUD/USD sharply higher. More US economic data is due on Friday, with Retail Sales and Industrial Production.
The key AUD/USD driver has been the weakness of the US Dollar, which remains intact. Some consolidation seems likely after the sharp decline, but, at the moment, the US Dollar is not showing signs of life.
AUD/USD short-term technical outlook
The daily chart shows AUD/USD around 0.6790, between the 55- and 100-period Simple Moving Average (SMA) and above the 200-period SMA. The key level has become 0.6800; a clear break above could open the door to more gains over the following weeks. Technical indicators support the bullish case.
On the 4-hour chart, the AUD/USD is firm, well above key SMAs and looking at more gains. However, the RSI is moving slowly away from the extreme overbought readings (not seen in months), which suggests some consolidation ahead before another test of 0.6800. A break above 0.6800 would point to an extension targeting 0.6820 initially; the next resistance is at 0.6840. A correction could target 0.6760, where buyers could reappear; below the next support emerges at 0.6720. A slide under 0.6680 would change the bullish short-term outlook to neutral/bearish.
Support levels: 0.6750 0.6725 0.6675
Resistance levels: 0.6820 0.6840 0.6870
View Live Chart for the AUD/USD
AUD/USD Current Price: 0.6793
- Australian labor market remains strong, while it appears to be softening in the US.
- AUD/USD soars amid risk appetite and weaker US Dollar.
- Short-term outlook points to more gains despite overbought indicators.
The AUD/USD rose sharply on Thursday, after accelerating to the upside during the American session on the back of risk appetite and broad-based Dollar’s weakness. The pair is at its strongest level since late February and looks set to extend gains.
The Australian Employment report came in better than expected on Thursday, showing employment increased by 53K in March, surpassing the 20K of market consensus. The Australian Bureau of Statistics also reported that the Unemployment Rate remained unchanged at 3.5%, against estimates of an increase to 3.6%.
The appreciation of the Aussie following the Australian jobs reports was limited, reflecting that despite another upbeat jobs report, the Reserve Bank of Australia (RBA) is still seen on pause in May. A better mood across financial markets also offered support to the pair. China reported an increase in exports in March of 14.8%, against expectations of a 7% slide; imports dropped by 1.4%, less than the 5% fall forecast.
The bullish breakout in AUD/USD took place during the American session when it jumped above 0.6730 following the release of US economic data. Wholesale inflation dropped more than expected in March, and Initial Jobless Claims rose above consensus to monthly highs, pointing to a softer labor market. The US Dollar tumbled after those numbers, pushing AUD/USD sharply higher. More US economic data is due on Friday, with Retail Sales and Industrial Production.
The key AUD/USD driver has been the weakness of the US Dollar, which remains intact. Some consolidation seems likely after the sharp decline, but, at the moment, the US Dollar is not showing signs of life.
AUD/USD short-term technical outlook
The daily chart shows AUD/USD around 0.6790, between the 55- and 100-period Simple Moving Average (SMA) and above the 200-period SMA. The key level has become 0.6800; a clear break above could open the door to more gains over the following weeks. Technical indicators support the bullish case.
On the 4-hour chart, the AUD/USD is firm, well above key SMAs and looking at more gains. However, the RSI is moving slowly away from the extreme overbought readings (not seen in months), which suggests some consolidation ahead before another test of 0.6800. A break above 0.6800 would point to an extension targeting 0.6820 initially; the next resistance is at 0.6840. A correction could target 0.6760, where buyers could reappear; below the next support emerges at 0.6720. A slide under 0.6680 would change the bullish short-term outlook to neutral/bearish.
Support levels: 0.6750 0.6725 0.6675
Resistance levels: 0.6820 0.6840 0.6870
View Live Chart for the AUD/USD
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.