AUD/USD Forecast: At risk of plummeting to fresh 2022 lows

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6404

Australian Trade Balance posted a surplus of $A8.32 billion in August, missing expectations.
The Reserve Bank of Australia will release on Friday the Financial Stability Review.
AUD/USD buyers gave up, and the pair trades near the year-low at 0.6362.

The AUD/USD pair retreated further from its weekly high and trades in the 0.6400 price zone after bottoming at 0.6388. The Australian dollar suffered from a disappointing August Trade Balance, as it posted a surplus of $A 8.32 billion, missing the expected $A 10.5 billion. Monthly imports were up 4.5%, while exports increased by 2.6%.

The figure came out after the Reserve Bank of Australia noted in its monetary policy statement that the economy is growing solidly by a record level of the terms of trade, averaging $A 10 billion this year. Additionally, the country published the September AIG Performance of Construction Index, which declined to 46.5 from 47.9 in August.

AUD/USD demand was undermined by a risk-averse environment that benefited the greenback. Global stocks traded with a weak tone, with most major indexes finishing the day in the red amid recession and inflation concerns. On Friday, the Reserve Bank of Australia will publish the Financial Stability Review, an assessment of the financial system.

AUD/USD short-term technical outlook

The AUD/USD pair has briefly traded above a Fibonacci level, the 23.6% retracement of the latest daily decline between 0.6915 and 0.6363, but then plummeted below it, which favors a downward extension through the base of the range.

Technical readings in the daily chart support the bearish case, as the pair develops well below bearish moving averages. At the same time, technical indicators head south within negative levels, with the RSI currently approaching oversold readings.

In the near term, and according to the 4-hour chart, bears retain control. The pair finally slid below a still directionless 20 SMA while technical indicators reached fresh lows within negative levels. Meanwhile, the longer moving averages accelerated their slides far above the shorter ones, with the 100 SMA now at around the 38.2% retracement of the aforementioned rally at 0.6570.

Support levels:0.6360 0.6315 0.6270

Resistance levels: 0.6450 0.6490 0.6535

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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