AUD/USD Forecast: Bulls recover the 0.6700 threshold

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6726

Chinese mixed headlines weighed on the Australian Dollar at the beginning of the day.
Wall Street battled the dismal mood and trimmed most of its intraday losses.
AUD/USD holds on to daily gains, could extend its rally once above 0.6770.

The AUD/USD pair fell throughout the first half of the day, bottoming at 0.6668. The Australian Dollar was hit but soft Chinese and local data, which also dragged Asian shares into negative territory. The pair recovered during London trading hours and extended its gains well into Wall Street, as the US Dollar fell alongside United States government bond yields.

Noise coming from China and Russia

US indexes struggled for direction. Equities aimed north at the opening, turning red following comments from US President Vladimir Putin, veiled threatening a nuclear war. Still, stocks quickly bounced back, adding pressure on the US Dollar and maintaining AUD/USD on the winning side, now trading in the 0.6720 price zone.

Australia published the November AIG Performance of Services Index, which contracted further, to 45.6 from 47.7 in October. The Q3 Gross Domestic Product (GDP) rose at an annualized pace of 5.9%, better than the previous 3.6% but missing the expected 6.3%. In the three months to September, the economy grew by 0.6%, below the 0.9% of the second quarter and missing the 0.7% forecast.

News coming from China were mixed. On the one hand, the country announced a series of measures relaxing coronavirus restrictions, moving away from the zero-Covid policy. On the other, macroeconomic data was discouraging. The November Trade Balance posted a surplus of #69.84 billion, as exports fell by 8.7%, while imports were down 1.1%. The poor figures revived concerns of a global economic setback.

On Thursday, the Reserve Bank of Australia (RBA) will publish its Q3 Bulletin and the October Trade Balance, expected to post a modest surplus of $A1.15 billion. The United States will offer nothing of interest, as it will only publish the usual weekly unemployment figures.

AUDUSD short-term technical outlook

The daily chart for AUD/USD favors an upward extension without confirming it. The pair met buyers around a flat 100 Simple Moving Average (SMA), recovering above a bullish 20 SMA which maintains its bullish slope above the longer one. At the same time, technical indicators have rotated north, but remain within neutral levels, lacking strength enough to confirm a bullish extension.

In the near term, and according to the 4-hour chart, the upside seems limited. The AUD/USD pair is unable to overcome a bearish 20 SMA but stands above a flat 100 SMA. The 200 SMA, in the meantime, heads firmly higher far below the current level. Technical indicators, in the meantime, have recovered from near oversold readings. However, the Momentum maintains its bullish slope but below its midline, while the Relative Strength Index (RSI) turned flat after reaching its midline.

Support levels: 0.6670 0.6625 0.6580

Resistance levels: 0.6730 0.6770 0.6815

View Live Chart for the AUDUSD

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.

AUD/USD sits near a one-month top, above 0.7000 amid fresh USD selling

AUD/USD holds above 0.7000 through the Asian session, trading near a one-month high touched earlier this Monday amid renewed US Dollar selling. US bond yields decline further amid a modest pullback in crude oil prices, capping the USD recovery from a three-week low. Moreover, bets for a November RBA rate hike support the Aussie, though upside seems capped ahead of the crucial two-day FOMC meeting, starting Tuesday.

USD/JPY struggles below 157.00 on weak USD; holds above one-month low ahead of Fed, BoJ meetings

USD/JPY attracts fresh sellers during the Asian session on Monday, stalling its recovery from the lowest level since September 18, touched Friday as a further decline in US bond yields weighs on the US Dollar. Meanwhile, the Japanese Yen benefits from a more hawkish BoJ, further weighing on the currency pair. The downside, however, seems limited as traders keenly await Fed and BoJ policy meetings later this week.

Gold looks slightly bid above $4,000

Gold manage to regain some balance, leaving behind two daily drops in a row and reclaiming the key $4,000 mark per troy ounce and above on Monday. The better tone in the US Dollar and mixed US Treasury yields accompany the precious metal’s uptick, while declining crude oil prices appear to sustain the bounce for now.

Bitcoin stalls around $80,000 as geopolitical tensions dampen risk appetite

Bitcoin hovers around $80,500 on Monday after three straight weeks of correction. Rising geopolitical tensions in the Middle East continue to push oil prices higher, stoking inflation concerns and dampening risk appetite.

Everyone's bracing for a hawkish central bank week. Here's why the surprise could be dovish

Five of the world's major central banks are preparing to announce monetary policy decisions this week, with investors increasingly anticipating higher interest rates as the global energy shock continues to push inflation above target.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.