AUD/USD Forecast: bit of relief, bearish anyway
|AUD/USD Current price: 0.7066
- Australian dollar advances modestly on equities' strength, dollar's weakness.
- Break of yearly low could trip stops and result in a steeper decline.
The AUD/USD pair advances in thin trading, now at daily highs in the 0.7060 price zone, a shy advance when considering stocks' behavior, with Wall Street closing up Thursday after a soft start to the day. The DJIA advanced roughly 1,300 points in the last two sessions, after collapsing on Christmas Eve. The Aussie tends to be quite sensitive to equities, which usually reflect market's sentiment, falling and rising alongside stocks. Nevertheless, the pair has barely advanced with equities run and in spite of broad dollar's weakness, a result of prevalent fear about a global economic downturn. The Australian dollar could gain some ground with higher equities and a weaker dollar, but chances of sustained advances are pretty much null.
The short-term picture for the pair is neutral-to-positive, as, in the 4 hours chart, technical indicators aim higher within neutral levels, as it advances above a flat 20 SMA. In the same chart, however, the 100 SMA accelerated its decline well above the current level, and moving away from the 200 SMA, this last around 0.7220, reflecting the absence of AUD demand. The weekly high comes at 0.7077, acting as an immediate short-term resistance, with gains above the level probably supporting an extension toward 0.7100/10. Below 0.7015, on the other hand, stops could be triggered, resulting in a steeper decline toward 0.6950.
Support levels: 0.7015 0.6990 0.6950
Resistance levels: 0.7080 0.7110 0.7140
View Live Chart for the AUD/USD
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