AUD/USD Forecast: Bears add pressure, break through 0.6700 on the table

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6763

Growth-related figures showed major economies are still struggling to recover.
The US Dollar advanced throughout the second half of the day amid a souring market mood.
AUD/USD maintains the bearish tone ahead of the Asian opening, support at 0.6730.

The AUD/USD pair pierced the 0.6800 threshold on Tuesday, heading into the new day trading in the 0.6770 price zone. The US Dollar lost some ground at the beginning of the day but changed course during European trading hours, preserving its strength through the American session, as Wall Street traded with a soft tone while government bonds also lost ground.

Growth-related data released these days indicated major economies are still struggling to recover. China released the December NBS Manufacturing PMI on Sunday, which unexpectedly contracted to 49. At the same time, the NBS Non-Manufacturing PMI printed at 50.4, improving from 50.2 in November but missing expectations of 50.5. Meanwhile, similar data from Europe and America was released throughout the day, cooling expectations for soon-to-come rate cuts among major economies.

There are no macroeconomic figures scheduled for the upcoming Asian session, focusing on US data, as the country will publish the December ISM Manufacturing PMI, November JOLTS Job Openings and the FOMC Meeting Minutes.

AUD/USD short-term technical outlook

From a technical point of view, AUD/USD is in a corrective slide. The daily chart shows technical indicators retreating from overbought levels, maintaining their downward slopes within positive levels. At the same time, a firmly bullish 20 Simple Moving Average (SMA) heads firmly north above the longer ones, providing dynamic support at around 0.6700.

In the near term, and according to the 4-hour chart, the risk skews to the downside. AUD/USD gained downward traction after failing to recover above a now bearish 20 SMA. The 100 and 200 SMAs keep heading higher, well below the current level, although technical indicators head south well below their midlines. Further slides could be expected on a break through 0.6730, the immediate support level.

Support levels: 0.6730 0.6995 0.6960

Resistance levels: 0.6810 0.6845 0.6870

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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