AUD/USD Forecast: Buyers likely to add pressure once 0.6640 gets cleared

AUD/USD Current Price: 0.6616

• Upbeat Australian employment data maintained the Aussie afloat throughout the day.
• Reserve Bank of Australia Governor Michele Bullock is due to testify before Congress.
• AUD/USD holds near its weekly high but is yet to confirm a bullish continuation.

The AUD/USD pair trades near its weekly high at 0.6642 after bottoming at 0.6567 at the beginning of the day. The Aussie surged during Asian trading hours following the release of the Australian monthly employment report, which showed that the country added 58.2K new jobs in July, much better than the 20K expected. Even further, the report showed 60.5K new full-time positions and 2.3K less part-time jobs. On a negative note, the Unemployment Rate rose to 4.2% against expectations of an unchanged 4.1%.  

Also, Consumer Inflation Expectations rose in August to 4.5% from 4.3% in the previous month. The Reserve Bank of Australia (RBA) is in no rush to trim interest rates and will likely be among the latest to abandon tight monetary policy. Market players know this and pay little attention to the discouraging news.

 The firm tone of global stocks maintained the pair in positive territory throughout the day, even while demand for the US Dollar surged following the release of upbeat American data. However, the same figures pushed equities further up as better-than-anticipated Retail Sales and encouraging employment-related numbers cooled down concerns about a potential recession in the world’s largest economy.  As stocks advanced, the downside remained limited for AUD/USD.

The upcoming Asian session will bring a public appearance of RBA Governor Michele Bullock. Bullock is due to testify before the House of Representatives Standing Committee on Economics alongside other policymakers. Her words will be closely followed in searching for clues about the future of monetary policy. Later in the day, the US will publish the preliminary estimate of the August Michigan Consumer Sentiment Index and Consumer Inflation Expectations for the same month.

AUD/USD short-term technical outlook

From a technical point of view, the AUD/USD pair is poised to extend its gains. In the daily chart, technical indicators hold within positive levels, although lacking directional momentum. At the same time, the pair met buyers around a bearish 20 Simple Moving Average (SMA), which maintains its bearish slope below flat 100 and 200 SMAs. However, the pair also recovered above the longer moving averages, limiting the downward risk.

The 4-hour chart offers a near-term neutral stance. The pair is holding above a flat 20 SMA, but a directionless 200 SMA at around 0.6640 rejects advances since the beginning of the week. Technical indicators, in the meantime, turned south but hold above their midlines. The bearish pressure could increase if AUD/USD extends its slide below 0.6570, a strong static support level.

 Support levels: 0.6600 0.6570 0.6530

Resistance levels: 0.6640 0.6675 0.6710