AUD/USD Forecast: holding on to gains amid equities' strength

AUD/USD Current price: 0.7284

  • Chinese trade surplus with the US up by 11.5% in the year to October.
  • US Federal Reserve set to keep rates on hold, maintain the hawkish stance.

The AUD/USD pair consolidates gains right below the 0.7300 figure, underpinned by stocks' strength around the world. Greenback's post-election sell-off pared, and the American currency seems to be trying to recover some ground, although the Aussie is today among the strongest. There were no macroeconomic news in Australia overnight, but China released its October trade balance data. In dollar terms, the surplus was of $34.01B, slightly below the expected, while imports soared 21.4% from a year earlier, and exports increased by 15.6%, both above expected. The figures also showed that exports to the US increased 8.7%, while imports from the country were up 3.7%. Yearly basis, the Chinese surplus with the US increased by 11.5%, proving Trump's trade-war not solving the trade imbalance.

The US will release today weekly unemployment claims figures, and more relevant, the latest Federal Reserve decision. The US Central Bank is expected to keep rates on hold and maintain its hawkish stance toward a December hike.

Ahead of the event, the 4 hours chart for the pair shows that it holds on to gains above a firmly bullish 20 SMA, as technical indicators lose upward strength, but hold near overbought levels. The same chart shows that the 100 SMA advances, nearing the 200 SMA from below, both roughly 150 pips below the current level, all of which maintains the downside limited, alongside strong equities. The key to the upside is 0.7314, October high, while below 0.7250, the pair could correct down to the 0.7200 figure.

Support levels: 0.7250 0.7210 0.7165    

Resistance levels: 0.7315 0.7340 0.7375

View Live Chart for the AUD/USD

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