AUD/USD Forecast: More losses likely while under 0.6380
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UPGRADEAUD/USD Current Price: 0.6355
- The US Dollar extends its rally due to risk aversion and positive US data.
- Australian inflation aligns with expectations; focus shifts to upcoming Retail Sales data.
- The AUD/USD pair to face downward pressure below the 0.6350 level.
The strength of the US Dollar has pushed the AUD/USD pair to its lowest level in almost a year. After reaching the 0.6330 area, it started a bounce. However, the bias remains tilted to the downside, and only a correction in the US Dollar could provide some relief.
In Australia, the Monthly Consumer Price Index (CPI) showed an increase in the annual rate to 5.2%, the first acceleration since April. With the CPI well above the 2-3% target range, the Reserve Bank of Australia (RBA) is likely to maintain a hawkish stance. However, the market still expects the RBA to hold rates steady at the October 3 meeting. However, expectations for another rate hike by Q1 of next year are above 50%. For the RBA, the upcoming quarterly CPI report on October 25 will likely be more important.
On Thursday, Australia will release August Retail Sales, which are expected to rise by 0.3% following a 0.5% increase in July. However, the economic figures are likely to be overshadowed by current market developments. If Wall Street's decline continues and impact Asian markets, the Australian Dollar will likely continue to face pressure.
The US Dollar extended its rally on Wednesday, driven by risk aversion and supported by positive US economic data. Durable Goods Orders rose 0.2% in August, surpassing expectations for a 0.5% decline. More data, including the weekly Jobless Claims, is due on Thursday.
AUD/USD short-term technical outlook
The AUD/USD broke below 0.6350 and accelerated its decline towards the 0.6330 area, which has now become a key support level to consider before reaching the 0.6300 area. Despite trading at multi-month lows and oversold conditions, the prevailing path of least resistance remains to the downside.
On the 4-hour chart, the Australian Dollar is attempting a recovery. If it successfully rises above 0.6365, it would alleviate bearish pressure. However, further losses are likely while staying below 0.6380. Negative momentum persists with the price trading below the 20-period Simple Moving Average (SMA). A break below 0.6330 would target 0.6305.
Support levels: 0.6330 0.6305 0.6280
Resistance levels: 0.6365 0.6400 0.6420
AUD/USD Current Price: 0.6355
- The US Dollar extends its rally due to risk aversion and positive US data.
- Australian inflation aligns with expectations; focus shifts to upcoming Retail Sales data.
- The AUD/USD pair to face downward pressure below the 0.6350 level.
The strength of the US Dollar has pushed the AUD/USD pair to its lowest level in almost a year. After reaching the 0.6330 area, it started a bounce. However, the bias remains tilted to the downside, and only a correction in the US Dollar could provide some relief.
In Australia, the Monthly Consumer Price Index (CPI) showed an increase in the annual rate to 5.2%, the first acceleration since April. With the CPI well above the 2-3% target range, the Reserve Bank of Australia (RBA) is likely to maintain a hawkish stance. However, the market still expects the RBA to hold rates steady at the October 3 meeting. However, expectations for another rate hike by Q1 of next year are above 50%. For the RBA, the upcoming quarterly CPI report on October 25 will likely be more important.
On Thursday, Australia will release August Retail Sales, which are expected to rise by 0.3% following a 0.5% increase in July. However, the economic figures are likely to be overshadowed by current market developments. If Wall Street's decline continues and impact Asian markets, the Australian Dollar will likely continue to face pressure.
The US Dollar extended its rally on Wednesday, driven by risk aversion and supported by positive US economic data. Durable Goods Orders rose 0.2% in August, surpassing expectations for a 0.5% decline. More data, including the weekly Jobless Claims, is due on Thursday.
AUD/USD short-term technical outlook
The AUD/USD broke below 0.6350 and accelerated its decline towards the 0.6330 area, which has now become a key support level to consider before reaching the 0.6300 area. Despite trading at multi-month lows and oversold conditions, the prevailing path of least resistance remains to the downside.
On the 4-hour chart, the Australian Dollar is attempting a recovery. If it successfully rises above 0.6365, it would alleviate bearish pressure. However, further losses are likely while staying below 0.6380. Negative momentum persists with the price trading below the 20-period Simple Moving Average (SMA). A break below 0.6330 would target 0.6305.
Support levels: 0.6330 0.6305 0.6280
Resistance levels: 0.6365 0.6400 0.6420
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