AUD/USD Forecast: Bearish divergences suggest Aussie may turn south

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6657

RBA’s Governor Lowe said that the economy might be in a better condition than originally feared.
The Aussie’s advance could be once again attributed to equities’ rally.
AUD/USD is holding near a fresh multi-week high but further gains at doubt.

Having started the day with a soft tone, the AUD/USD pair is ending it with gains near the multi-week high set this Wednesday at 0.6679. RBA’s Governor Lowe spoke at the beginning of the day and backed the Aussie by saying that the economy may be in a better condition than originally feared, adding that the stimulus package launched in March seems to be performing well. On rates, Lowe said that they are unlikely to rise for some years.

The pair’s rally, however, was once again the result of equities’ solid performance and the dollar’s broad weakens. Early on this Friday, Australia will publish Private Sector Credit for April.

AUD/USD short-term technical outlook

The AUD/USD pair is trading in the 0.6650 price zone, and the 4-hour chart shows that a bullish 20 SMA continued to provide dynamic support. Still, the bullish potential seems limited, at least as long as the pair remains below the 0.6680 price zone, as the Momentum indicator keeps heading lower, now approaching its 100 level, drawing a clear divergence. The RSI indicator barely retreats, currently at around 61.

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.

EUR/USD holds firm above 1.1900 as US NFP looms

EUR/USD holds its upbeat momentum above 1.1900 in the European trading hours on Wednesday, helped by a broadly weaker US Dollar. Markets could turn cautious later in the day as the delayed US employment report for January will takes center stage.

GBP/USD remains above nine-day EMA near 1.3650

GBP/USD recovers its recent losses from the previous session, trading around 1.3680 during the European hours on Wednesday. The technical analysis of the daily chart indicates a sustained bullish bias, as the pair trades within an ascending channel pattern.

Gold sticks to gains near $5,050 as focus shifts to US NFP

Gold holds moderate gains near the $5,050 level in the European session on Wednesday, reversing a part of the previous day's modest losses amid dovish US Federal Reserve-inspired US Dollar weakness. This, in turn, is seen as a key factor acting as a tailwind for the non-yielding yellow metal ahead of the critical US NFP release.

US Nonfarm Payrolls expected to show modest job gains in January

The United States Bureau of Labor Statistics will release the delayed Nonfarm Payrolls data for January on Wednesday at 13:30 GMT. Investors expect NFP to rise by 70K following the 50K increase recorded in December.

S&P 500 at 7,000 is a valuation test, not a liquidity problem

The rebound from last week’s drawdown never quite shook the sense that it was being supported by borrowed conviction. The S&P 500 once again tested near the 7,000 level (6,986 as the high watermark) and failed, despite a macro backdrop that would normally be interpreted as supportive of risk.

Bitcoin price slips below $67,000 ahead of US Nonfarm Payrolls data

Bitcoin price extends losses, and trades below the lower consolidating boundary at $67,300 at the time of writing. A firm close below this level could trigger a deeper correction for BTC. Despite the weakness in price action, institutional demand shows signs of support, recording mild inflows in ETFs so far this week.