AUD/USD Forecast: Bears poised to challenge June’s low

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6907

Wall Street plunged, reflecting mounting recession-related concerns.
Australia will publish on Thursday, May Retail Sales, seen up by 0.4% MoM.
AUD/USD gains bearish traction and could retest June low at 0.6850.

The AUD/USD pair closed in the red for a second consecutive day, although losses are limited as it trades in the 0.6900 price zone. The pair surpassed Monday’s high by a few pips, hitting 0.6964 before retreating. The greenback found the market’s favor ahead of the US opening, maintaining the positive tone throughout the session, as fears underpinned the safe-haven USD and sent US indexes down.

Wall Street reached fresh weekly lows and is back flirting with bearish territory amid recession-related concerns and ahead of the release of US core PCE inflation for the first quarter of the year on Wednesday. Earlier in the day, Australia will release May Retail Sales, which is seen up a modest 0.4% MoM.

AUD/USD short-term technical outlook

The AUD/USD pair retreated for a third consecutive day from around the 23.6% retracement of its latest daily decline between 0.7282 and 0.6855 in the 0.6950 area. According to the daily chart, the risk remains skewed to the downside, as technical indicators remain within negative levels while the pair develops below a firmly bearish 20 SMA.

The 4-hour chart shows that AUD/USD is sliding below a flat 20 SMA, while the 100 SMA accelerates south below the 200 SMA, both far above the current level and hinting at increased selling interest. Meanwhile, technical indicators gain bearish strength and are currently piercing their midlines, also suggesting further slides ahead.

Support levels: 0.6885 0.6850 0.6810

Resistance levels: 0.6955 0.6990 0.7030

View Live Chart for the AUD/USD

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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.

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