AUD/USD Forecast: Bullish but needs to break 0.6700, attention turns to Australian jobs

Matías Salord FXStreet

AUD/USD Current Price: 0.6691

US dollar falls across the board after US consumer inflation data.
Aussie outperforms on Wednesdays, eyes on Australian employment numbers.
AUD/USD needs to surpass 0.6700 to open door to more gains.

The AUD/USD rose on Wednesday, recovering key levels on the back of a weaker US Dollar across the board after softer-than-expected US inflation data and amid a slightly positive tone in the market. The pair is struggling around 0.6700 ahead of the Australian employment report. The Aussie outperformed on Wednesday, with AUD/NZD reaching weekly highs near 1.0800 and AUD/CAD testing levels above 0.9000.

Reserve Bank of Australia (RBA) Deputy Governor, Michele Bullock, said on Wednesday that they would have paused interest rate hikes even without the global banking crisis. She added that rates are in restrictive territory, and they “can stop for a minute and watch”.

Early on Thursday, Australia will release the Employment report. Market consensus is for a 20,000 job gain in March and for the Unemployment Rate to rise from 3.5% to 3.6%. Before the jobs data, the Melbourne Institute will release its Consumer Inflation Expectations report, which is expected to increase from 5% to 5.3% for the next twelve months. After Australian economic figures, China will publish March trade data.

The US Dollar weakened after March consumer inflation figures. The annual Consumer Price Index (CPI) rate dropped to 5%, but the Core rate increased to 5.6%. Meanwhile, the FOMC minutes offered no new information, and the Greenback remained weak. More inflation data is due on Thursday with the Producer Price Index; the US will also release the weekly Jobless Claims report.

As the US Dollar looks set to extend the decline, it could offer a boost to the AUD/USD. However, the positive mood among investors faded in Wall Street, limiting the upside in the commodity currency block.

AUD/USD short-term technical outlook

The daily chart shows that AUD/USD has risen above the 20-period Simple Moving Average (SMA). It peaked on Wednesday at 0.6722 and then pulled back, respecting the 0.6675 support; while above the latter, the bias favors more gains ahead.

On the 4-hour chart, the Aussie is looking bullish but needs to surpass and hold above 0.6700 to get more conviction. Price is moving between many relevant SMAs and is firm above the 20-period SMA that is turning to the upside. Technical indicators give sustenance to the case of more gains, with RSI and Momentum moving steadily north. If AUD/USD declines under 0.6660, the outlook for the Aussie would weaken.

Support levels: 0.6675 0.6630 0.6600

Resistance levels: 0.6730 0.6755 0.6800

View Live Chart for the AUD/USD

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Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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