AUD/USD Forecast: Data and mood helps Aussie, but not enough

Matías Salord FXStreet

AUD/USD Current Price: 0.6641

Australian jobs report boosted the Aussie on Thursday.
Improvement in market sentiment helped AUD/USD to hold on to daily gains.
After hours of consolidation, AUD/USD offers no clear signs.

The AUD/USD rose on Thursday, partially recovering from Wednesday’s slide. The combination of upbeat Australian employment data and an improvement in global stock markets helped the Aussie, which was among the top performers. The recovery faded around 0.6660, and the pair has traded steady around 0.6650 since the beginning of the American session.

The Australian jobs report for February beat expectations. After two months of declines, employment registered a gain of 64,600, surpassing the market consensus of 48,500. In addition, the Unemployment Rate dropped from 3.7% to 3.5%, even with an increase in the Participation Rate from 66.5% to 66.6%. Overall, it was a strong report that keeps a 25 bps rate hike by the Reserve Bank of Australia on the table for April’s meeting. Still, there is a long way to go, considering what is happening with the banking sector and next week’s FOMC meeting.

Market participants ignored US economic data on Thursday. Also, the reaction to the European Central Bank’s decision was remarkably limited. Wall Street rebounded, helped by reports of big US banks helping another bank in the lookout. The better mood weighed on the US Dollar Index. Systemic risk fears will likely dominate price action over the next hours.

On Friday, with no tier-one events on the economic calendar, attention is set to continue on developments around the financial industry across the globe. If fears continue to fade, the Aussie could receive a boost, helping it hold on to weekly gains versus the US Dollar. Market participants will start positioning for next week’s FOMC meeting.

AUD/USD short-term technical outlook

The AUD/USD moved away from monthly lows, staging a needed recovery that was capped by the 0.6660 area. Technical indicators offer no clear signs after hours of consolidation in a small range. A slide below 0.6630 would put the AUD/USD on the road again for 0.6600. Below, there is not much until the critical support area of 0.6560/80 that is keeping the pair afloat.

The 4-hour chart shows the 20-period Simple Moving Average acting as resistance around 0.6660. A break higher could lead to a test of the horizontal and psychological area of 0.6700, reinforced by a downtrend line. If the Aussie holds above the 0.6705 zone, it would retake a key technical area. A failure to rise above might be seen as the sellers are still in control.

Support levels: 0.6630 0.6570 0.6530

Resistance levels: 0.6665 0.6695 0.6730

View Live Chart for the AUD/USD

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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.

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