AUD/USD Forecast: Bullish potential limited despite risk-on mood

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6906

The poor performance of Wall Street capped the upside for AUD/USD.
Australia will release the TD Securities Inflation report, previously at 1.5% YoY.
AUD/USD battling to recover the 0.6900 mark, buying interest receding.

The AUD/USD pair closed the week around the 0.6900 level after hitting a daily high of 0.6910 on Friday, following the release of US employment data. However, sellers around the area kept buyers in check, with the pair unable to extend gains beyond a critical resistance area. The Aussie recovered throughout Friday underpinned at the beginning of the day by stronger than expected Australian November Retail Sales, up by 0.9% MoM. AUD/USD recovery was interrupted by the poor performance of equities, with the three major US indexes closing the day in the red. This Monday, Australia will publish the TD Securities Inflation report, previously at 1.5% YoY.

AUD/USD short-term technical outlook

The AUD/USD pair is trading a few pips below the 61.8% retracement of its latest bullish run, this last at 0.6915. The daily chart shows that the 20 DMA converges with the mentioned Fibonacci level, while around a mild-bearish 200 SMA. Technical indicators, in the meantime, hover around their midlines without signaling a clear directional movement ahead. Shorter-term, and according to the 4-hour chart, the pair has managed to recover above its 20 and 200 SMA, while technical indicators stand in positive levels although losing strength, reflecting limited buying interest.

Support levels: 0.6840 0.6800 0.6770

Resistance levels: 0.6915 0.6950 0.6990

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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