AUD/USD Current Price: 0.6746
- Australian trade surplus shrank more than anticipated in July to $A8.73 billion.
- Policymakers put inflation before growth, commit to tighter monetary policies.
- AUD/USD could gain near-term strength once above the 0.6770 level.
The AUD/USD pair fell to 0.6712 on Thursday, trimming most of its intraday losses to end the American session around 0.6750. Australian data published at the beginning of the day disappointed, as the Trade Balance surplus shrank by more than anticipated in July, down to $A8.73 billion against the $A14.5 billion expected. Exports plunged by 9.9% in the month, while imports rose by 5.2%.
The greenback surged ahead of the US opening, but gains were limited amid Wall Street reversing early losses. Equities fell after the European Central Bank and US Federal Reserve chief Powell discussed monetary policies and inflation in separate events. ECB Lagarde moved closer to its American counterpart after hiking rates by 75 bps and hiking at further adjustments. Both leaders put the accent on inflation and diminished the odds of a recession.
Australia will not release relevant data on Friday.
AUD/USD short-term technical outlook
From a technical point of view, the AUD/USD pair remains at risk of falling. The daily chart shows that the pair remains far below firmly bearish moving averages, while technical indicators remain directionless below their midlines, reflecting the absence of substantial buying interest.
In the near term, and according to the 4-hour chart, the upside seems limited. The pair is unable to overcome a bearish 20 SMA, now hovering around it, while technical indicators advance but within negative levels. A strong static resistance level comes at 0.6770, with more near-term gains likely once above it.
Support levels: 0.6720 0.6680 0.6640
Resistance levels: 0.6770 0.6810 0.6855
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