AUD/USD Forecast: Aussie under pressure, looking at YTD lows
AUD/USD Current Price: 0.6610
- Australian employment data came in below expectations, weighing on the Australian Dollar.
- A strong US dollar adds pressure to the AUD/USD pair.
- The bias in the pair is to the downside, focusing on the 0.6600 level and then the 2023 lows.
The AUD/USD dropped sharply on Thursday, affected by Australian economic data and a stronger US dollar across the board. The pair fell to the 0.6600 area and remains under pressure, with a test of the 2023 lows on the table, particularly if the US dollar remains strong.
Australia reported that its economy lost 4,300 jobs in April, against expectations of a 20,000 increase. On the positive side, March's numbers were revised from 53,000 to 61,100. The Unemployment Rate rose from 3.5% to 3.7%. The numbers favor expectations of no change at the next Reserve Bank of Australia (RBA) meeting on June 6th.
The jobs numbers alleviated the pressure on the RBA, adding to the wage data released on Wednesday. The next critical report ahead of the monetary policy meeting will be in two weeks with the monthly Consumer Price Index.
While the Aussie lagged, the US dollar was the top performer, boosted by rising Treasury yields. Comments from Federal Reserve's Logan suggesting the possibility of another rate hike and economic data from the US above expectations on Treasury yields (Jobless Claims and Philly Fed) favored the US dollar on Thursday. With no new economic data scheduled for Friday, attention will continue on Fed talk, which includes Chair Powell and debt ceiling negotiations.
AUD/USD short-term technical outlook
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At the beginning of the American session, the AUD/USD lost the support area at 0.6630/40 and continued downwards towards 0.6600, the next key short-term support level. The bearish bias will remain strong while the pair trades below 0.6630. If it drops below 0.6600, a test of the March low at 0.6560/65 seems likely. The next strong support area is seen at 0.6525/30.
On the 4-hour chart, the pair is moving with a clear bearish bias. The immediate resistance is seen at 0.6635/40, and then a downtrend line and the 20-period Simple Moving Average (SMA) around 0.6660. Only if the pair trades above that latter level could the short-term bias change.
Support levels: 0.6600 0.6565 0.6530
Resistance levels: 0.6635 0.6660 0.6710
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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.
