AUD/USD Forecast: Bears gearing up for a test of 0.6500
AUD/USD Current Price: 0.6690
- RBA hiked by 25 bps and left the door open for additional tightening.
- US Dollar appreciated amid another bad day on Wall Street.
- AUD/USD trimmed early gains and pressure weekly lows, hinting at another leg south.
The AUD/USD pair failed to retain early gains and finished Tuesday pretty much unchanged at around 0.6690. The Australian Dollar advanced at the beginning of the day after the Reserve Bank of Australia (RBA) announced its monetary policy decision. As widely anticipated, the Board lifted the Official Cash Rate (OCR) by 25 basis points to 3.1% from 2.85%.
The accompanying statement was seen as more hawkish than anticipated as Governor Philip Lowe and co left the doors open for additional tightening. However, policymakers removed the references to Central Consumer Price Index (CPI) and the unemployment rate in the upcoming months, reflecting high levels of uncertainty.
The American Dollar gathered momentum after London’s close as Wall Street remained under selling pressure. US indexes have been on the back foot for a fourth consecutive session as investors await the US Federal Reserve decision on monetary policy in a couple of weeks. It is worth adding the US Dollar advanced despite easing US Treasury yields.
On Wednesday, Australia will publish the third quarter Gross Domestic Product. The economy is expected to have grown at an annualized pace of 6.3%, much better than the previous quarter's 3.6%. In the three months to September, growth is seen at 0.7%, slightly worse than the previous 0.9%. The country will also release the November AIG Performance of Services Index, previously at 47.7.
AUDUSD short-term technical outlook
The daily chart for AUD/USD shows that the price is currently hovering with its 20 and 100 SMAs, the shorter one advancing and the longer one still flat. Technical indicators, in the meantime, stand directionless within neutral levels and at their lowest since early November, skewing the risk to the downside without confirming another leg south.
According to technical readings in the 4-hour chart, the chances are of another leg south. The pair is developing below the 20 and 100 SMAs, with the shorter one accelerating its decline. Technical indicators stand within negative levels, the Momentum aiming modestly higher, but the RSI heading south at around 37.
Support levels: 0.6670 0.6625 0.6580
Resistance levels: 0.6730 0.6770 0.6815
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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.
