AUD/USD Forecast: Bearish case should gain adepts once below 0.6930
AUD/USD Current Price: 0.6948
- Australia will publish December employment figures on Thursday.
- Global government bond yields plummeted after the BoJ’s monetary policy decision.
- AUD/USD trades near its weekly low and could accelerate its decline once below it.
The AUD/USD pair peaked at 0.7062 on Wednesday, its highest since last August, but changed direction during US trading hours to end the day in the red in the 0.6940 price zone. The pair rallied at the beginning of the day as the American Dollar edged sharply lower against high-yielding rivals following the Bank of Japan monetary policy decision. The central bank decided to maintain its ultra-loose policy unchanged, pledging to “continue monetary easing to achieve sustainable, stable inflation to take hold.” The decision to keep the yield-curve control program unchanged had a positive impact on yields, which retraced globally.
Things changed ahead of the US opening, as softer-than-expected US data sent investors into safety. Stocks plunged, while the US Dollar recovered despite government bond yields further down.
Australia did not publish relevant data on Wednesday, but during the upcoming Asian session, the country will release December employment data. The country is expected to have added 22,500 new job positions in the month, while the Unemployment Rate is expected to remain unchanged at 3.4%.
AUD/USD short-term technical outlook
The AUD/USD pair could extend its slide, particularly if it breaks below its weekly low at 0.6929. Still, technical readings in the daily chart fall short of anticipating a drop, as the pair keeps developing above its moving averages, with the 20 SMA crossing above the 200 SMA, both at around 0.6835. Technical indicators, in the meantime, turned south but remain well above their midlines.
The 4-hour chart shows that the pair ends the day below a flat 20 SMA, while the longer ones keep heading north far below the current level. Technical indicators have crossed their midlines into negative territory, although their bearish momentum is limited.
Support levels: 0.6930 0.6880 0.6835
Resistance levels: 0.7020 0.7065 0.7110
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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.
