AUD/USD Forecast: At multi-week highs, bullish

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6665

Aussie held on to the higher ground against the greenback despite the poor performance of equities.
Chinese data mixed, although manufacturing output grew for a third consecutive month in May.
AUD/USD technically bullish, although the momentum seems limited ahead of 0.6700.

The AUD/USD pair surged to a fresh multi-week high of 0.6682 on Friday, finishing the week with gains at 0.6665. The pair traded with a soft tone for most of last Friday, as local data failed to impress while equities, reflecting the risk-related sentiment, had a poor performance ahead of US President Trump speech. Australian Private Sector Credit remained pat in April and increased by 3.6% when compared to a year earlier. Asian and European indexes closed in the red, while US indexes ended mixed, recovering ahead of the close as Trump’s speech failed to surprise.

Over the weekend, China published the May NBS Manufacturing PMI, which came in at 50.6 from 50.8 in the previous month, missing the market’s expectations but indicating that the manufacturing sector expanded for a third consecutive month. The Non-Manufacturing PMI in the same month, improved to 53.6 from 53.2 in April. Early Monday, Australia will publish the AIG Performance of Manufacturing Index, previously at 35.9 and the final version of the Commonwealth Bank Manufacturing PMI, seen unchanged at 42.8. The country will also publish the May TD Securities Inflation, previously at 1.2% YoY.

AUD/USD short-term technical outlook

The AUD/USD pair has stalled its advance for a fourth consecutive day around its 200 DMA, although it’s developing above the 20 and 100 DMA, with the shortest advancing above the larger ones. Technical indicators in the daily chart have turned higher within positive levels, but remain below their weekly highs, with limited bullish momentum. In the shorter-term, and according to the 4-hour chart, the pair is also mildly bullish as the 20 SMA, which provided intraday support, is losing is bullish strength, as technical indicators advance within familiar levels in positive territory.

Support levels: 0.6635 0.6590 0.6545

Resistance levels: 0.6685 0.6720 0.6760

View Live Chart for the AUD/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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