AUD/USD Forecast: Bullish signs fade near the 20-day SMA
AUD/USD Current Price: 0.6358
- Australian Dollar outperformed on Tuesday; RBA Bullock to speak on Wednesday.
- US Dollar slides despite upbeat US data and higher Treasury yields.
- The AUD/USD extended its rebound from monthly lows but found resistance at 0.6380.
The AUD/USD rose for the second day in a row, extending its recovery from the 0.6285 area. The pair was boosted by the Reserve Bank of Australia (RBA) minutes and limited by upbeat US economic data. The pair is currently holding a modestly bullish stance. Attention now turns to RBA Governor Bullock's speech and Chinese data.
The RBA released the minutes of its latest meeting, which reaffirmed a hawkish bias and revealed that a rate hike was discussed. This keeps the possibility of a rate hike on the table for the November 7 meeting.
The combination of a stronger Aussie and a decline in the Kiwi, following New Zealand's inflation data, has pushed AUD/NZD higher, gaining more than a hundred pips and approaching 1.0800.
The AUD/USD initially pulled back slightly after the release of upbeat US data, including better-than-expected Retail Sales figures. However, it later rose and reached fresh highs. Nevertheless, during the American session, risk sentiment turned negative as stocks on Wall Street reversed course, which weighed on the pair.
On Wednesday, RBA Governor Bullock will speak at the Australian Financial Security Authority Annual Summit Panel. The Westpac Leading Index is also due. Additionally, Chinese GDP, Retail Sales, and Industrial Production figures will be relevant for the pair.
AUD/USD short-term technical outlook
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The AUD/USD continues its rebound from the 0.6285 area, potentially forming a double bottom pattern. Such patterns indicate a break above 0.6435 would be a relevant bullish signal. However, the pair is currently far from that area and losing momentum. On the daily chart, the rebound faded when it reached the 20-day Simple Moving Average (SMA) at 0.6380.
On the 4-hour chart, the pair maintains a bullish bias. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators point to the upside, but Momentum is decreasing towards 100. The price remains above the 20-SMA (0.6330), and there is potential for further gains as long as it stays above that level.
The next relevant resistance levels are seen at 0.6390, followed by 0.6435. If the price slides below 0.6330, the next support level to watch is at 0.6310, which serves as the last defense before another test of the crucial 0.6285 level. A break below that level could lead to a bearish acceleration, targeting 0.6255.
Support levels: 0.6330 0.6310 0.6280
Resistance levels: 0.6390 0.6434 0.6465
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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.
