AUD/USD Forecast: Time for consolidation
|AUD/USD Current Price: 0.6542
- RBA minutes and Bullock's comments fail to lift the Australian Dollar.
- US Dollar gains momentum after US Economic data, as US yields rebound.
- The AUD/USD retreats further after testing the 200-day SMA, finding support at 0.6520.
The AUD/USD retreated further on Wednesday to the 0.6520 area before rebounding modestly. The short-term outlook suggests that the pair could continue to hover around current levels as the US Dollar stabilizes, although the path of least resistance remains to the upside, with the US Dollar still under some pressure.
Despite the Reserve Bank of Australia (RBA) minutes and Governor Michele Bullock's comments, the market continues to see no rate hikes. The interest rate market indicates slightly more than a 20% chance of a hike at the February meeting.
On Thursday, the Judo Bank PMIs are due. In October, both the Services and Manufacturing sectors showed readings below 50; a recovery above that threshold could boost the Aussie.
Data from the US came in mixed on Wednesday but provided a boost to the ongoing Dollar correction. Initial Jobless Claims fell by 24,000 to 209,000 in the week ending November 18, a decline from three-month highs and below the market consensus of 225,000. Continuing Claims fell to 1.84 million in the week ending November 11. On the negative side, Durable Goods Orders tumbled by 5.1%, more than the expected 3.1% contraction.
The Greenback gained momentum as US Treasury yields rebounded to the upside. Risk appetite during the American session limited the Dollar's advance. The bias in AUD/USD still leans towards the upside as sentiment around the Dollar continues to be mainly negative. The US market will be closed on Thursday.
AUD/USD short-term technical outlook
The AUD/USD extended its decline after reaching the 200-day Simple Moving Average (SMA) on Tuesday at 0.6589. Technical indicators on the daily chart are biased to the upside, and the price remains above key SMAs, except for the 200-day SMA, which acts as a key resistance level.
On the 4-hour chart, technical indicators are offering mixed signals, and there is no strong conviction at the moment for another test of recent highs. The price is below the 20-SMA but found support at the 0.6520 zone. A decline below 0.6520 would expose 0.6500. Above 0.6570, another test of the 200-day SMA seems likely. Consolidation between 0.6520 and 0.6555 could continue ahead of the Asian session.
Support levels: 0.6520 0.6485 0.6460
Resistance levels: 0.6570 0.6590 0.6625
View Live Chart for the AUD/USD
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