AUD/USD Forecast: Another slide, testing levels under 0.6600

Matías Salord FXStreet

AUD/USD Current Price: 0.6598

US Dollar remains strong versus the Australian Dollar amid market concerns and despite lower US yields.
Inflation in Australia slows down further; RBA is likely to remain on hold next week.
AUD/USD tests 0.6600; below comes the YTD low at 0.6563.

The AUD/USD fell for the fourth consecutive day on Wednesday amid a stronger US Dollar and market concerns. As a result, the Australian Dollar lagged again. The outlook is negative, but the direction is US data-dependent.

Inflation in Australia fell in the first quarter from 7.8% to 7.0%, slightly above the 6.9% of market consensus. Measures of core inflation also slowed down to 6.6%. The March CPI printed 6.3% YoY. Next week, the Reserve Bank of Australia (RBA) will likely keep the key rate unchanged at 3.60% after the latest inflation numbers. But, with CPI still above the target, it will likely continue to suggest it could tighten further if necessary.
Market participants expect no change and priced in cuts by September. Those expectations will make economic data more relevant. The RBA will likely downgrade inflations forecasts.

Equity markets dropped again on Wednesday, supporting the demand for the US Dollar amid renewed banking concerns and a gloomy global outlook. An improvement in sentiment could help AUD/USD, while further negativity would make it difficult for the pair to hold above YTD lows. Key US economic data is due on Thursday.

AUD/USD short-term technical outlook

The picture for AUD/USD bulls has worsened on the daily chart after breaking essential short-term supports. It is about to post the lowest daily close since early March, and the 20-day Simple Moving Average (SMA) is turning south. On the downside, below 0.6600, is the March low at the 0.6565 zone, with interim support at 0.6580. Later emerges the 0.6530 area, another critical level.

On the upside, the immediate resistance is 0.6620, followed by 0.6670. The 4-hour chart shows the 20-period SMA at 0.6650; a recovery above would alleviate the bearish pressure.

Support levels: 0.6580 0.6560 0.6530

Resistance levels: 0.6620 0.6640 0.6670

View Live Chart for the AUD/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.