AUD/USD Forecast: Bears getting tired, potential bounce in the making
AUD/USD Current Price: 0.6945
- Australian NAB’s Business Confidence contracted by more than anticipated in April.
- Chinese inflation and Australian Consumer Confidence take center stage.
- AUD/USD bounced from a fresh 2022 low and may extend its corrective advance.
The AUD/USD pair fell to 0.6910, a fresh 2022 low, but managed to trim part of its intraday losses to end the day little changed in the 0.6940 price zone. Worse-than-anticipated Australian data put pressure on the local currency at the beginning of the day. NAB’s Business Confidence fell in April to 10 below the 14 expected, while NAB’s Business Conditions were up to 20, also missing the market’s forecast of 23.
The pair recovered to post a daily high of 0.6985 but was unable to hold on to gains in the final session of the day amid the resurgent greenback’s demand. The American currency got a boost from comments from Federal Reserve Cleveland President Loretta Mester, who said that a 75 bps rate hike is not out of the table “forever,” although adding that the current pace of hikes seems “about right.” Her words sent US indexes into the red, although Wall Street bounced back heading into the close, ending the day mixed and not far from its opening levels.
Early on Wednesday, Australia will publish May Westpac Consumer Confidence, previously at -0.9%, while China will unveil April inflation figures. The annual Consumer Price Index is foreseen to increase from 1.5% to 1.8%.
AUD/USD short-term technical outlook
The AUD/USD pair could correct its latest slump according to technical readings in the daily chart. Nevertheless, the risk is clearly skewed to the downside, and sellers may add at higher levels. The pair is ending the day with a doji after a sharp slide in the previous days, while the RSI indicator has turned flat around 31. The Momentum indicator keeps heading south within oversold readings, while the pair remains far below its moving averages.
The 4-hour chart shows that the pair remains below bearish moving averages but also shows that technical indicators have begun recovering ground, still holding within negative levels. The 0.7000 figure is a critical resistance as a firmer recovery could be expected once above it.
Support levels: 0.6920 0.6880 0.6835
Resistance levels: 0.7000 0.7050 0.7090
Premium
You have reached your limit of 3 free articles for this month.
Start your subscription and get access to all our original articles.
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.
