AUD/USD Forecast: Aussie holds above 0.6600, remains bearish

Matías Salord FXStreet

AUD/USD Current Price: 0.6600

Aussie recovers momentum supported by an improvement in market sentiment.
Volatility set to rise ahead of crucial week with tier-one reports, RBA and Fed.
AUD/USD rises after four days but still looks at 0.6600.

The AUD/USD rebounded after falling for four consecutive days, supported by an improvement in market sentiment. The pair dropped momentarily below 0.6600 during the American session after US data and then climbed toward 0.6630. Despite the recovery, the pair remains under pressure. If Wall Street indexes continue to move higher, the Aussie can survive above 0.6600.

The US Dollar rose after the release of US economic data that included lower-than-expected Q1 GDP figures, a decline in Jobless Claims and tumbling Pending Home Sales. Inflation indicators in the GDP report came in above expectations. During the American session, as equity prices advanced, the Greenback lost momentum and AUD/USD rebounded. On Friday, US consumer inflation data is due with the Core Personal Consumption Expenditures Price Index, Fed’s preferred inflation gauge.

On Friday, Australia will report the Producer Price Index (PPI) for the first quarter and March Private Sector Credit. Next Tuesday, the Reserve Bank of Australia (RBA) will decide on monetary policy. Market participants expected the central bank to keep rates unchanged at 3.60%, particularly after the latest inflation numbers that should lead to a downgrade in inflation forecasts. Still, the RBA is seen keeping the door open to more tightening as CPI remains above target.

AUD/USD short-term technical outlook

The AUD/USD rose on Wednesday modestly after avoiding a consolidation under 0.6600. The bias is down in the short term. The 4-hour charts show the price below the 20-period Simple Moving Average (SMA) and the pair attempting to reclaim 0.6630. If it manages to rise solidly above 0.6630, the Aussie will gain some support. The following relevant technical area is 0.6670.

On the flip side, 0.6595/0.6600 holds the key. A beak lower would expose the March low at 0.6565, with a pause probably at 0.6580. Below the next target is the 0.6530 area

Support levels: 0.6595 0.6565 0.6530
Resistance levels: 0.6630 0.6670 0.6670 0.6700

View Live Chart for the AUD/USD

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.

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