AUD/USD Forecast: Just a correction, bearish bias prevails
|AUD/USD Current Price: 0.6323
- The US Dollar experiences a modest drop, correcting from monthly highs.
- The ADP report came in softer than expected; more US employment data ahead will be crucial.
- The AUD/USD pair rebounds after a sharp two-day slide but remains under pressure.
The AUD/USD rose on Wednesday due to a decline in the US Dollar. However, the Greenback remains strong despite the soft ADP employment report. More US jobs data is scheduled for release on Thursday and Friday, which could be crucial.
US bond yields spiked on Wednesday and then pulled back. The US 10-year yield reached 4.88% before settling at 4.74%. The downward move weighed on the US Dollar that experienced a correction, that consolidated following the release of the ADP employment report. Private payrolls rose by 89,000 in September, the lowest since January 2021 and below the market consensus of 153,000. The ISM Services PMI for September came in line with expectations at 53.6, down from the 54.5 recorded in August.
The strong Dollar limited the rebound in AUD/USD. Fundamentals continue to favor the Greenback. The weekly Jobless Claims report is due on Thursday, followed by the Nonfarm Payroll report on Friday. These figures could weaken the positive trend of the USD if they reflect further signs of a slowdown. Conversely, upbeat numbers could boost the Dollar further.
The Australian S&P Global Services PMI showed improvement, with an increase to 51.8 in September, up from 47.8, marking the first positive reading in three months. On Thursday, Australia will report trade data. Despite the improvement, with the economy experiencing below-trend growth, the Reserve Bank of Australia (RBA) is expected to keep the key rate unchanged at 4.10%, unless there is a rebound in inflation.
AUD/USD short-term technical outlook
The AUD/USD rose after experiencing a significant decline over the past two days, resulting in a 200-pip slide from last week's high. However, the rebound faced resistance below the 0.6350 level. The overall trend remains downward, and there is an increased risk of reaching new lows as long as the pair remains below 0.6355.
On the 4-hour chart, the bias is tilted to the downside. The price remains below the 20-period Simple Moving Average (SMA) at 0.6355. On the downside, the immediate support is at 0.6310, and a decisive move below that level would intensify the bearish pressure, potentially exposing the recent low at 0.6283. A further break lower could target 0.6260. On the upside, for the rebound to gain strength and alleviate the bearish risks, it would need to surpass and hold above 0.6360.
Support levels: 0.6310 0.6280 0.6255
Resistance levels: 0.6340 0.6360 0.6400
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