AUD/USD Forecast: Jumps above 0.6600 after Fed move but remains vulnerable
Current price: 0.6604
- AUD/USD extends recovery from a decade-low after Fed rate cut.
- Short-term perspective improves but bearish pressure persists.
The Australian dollar extended its recovery against the greenback on Tuesday and reached a weekly high of 0.6645, more than 200 pips above its decade low struck on Friday at 0.6433. During the Asian session, the Reserve Bank of Australia decided to lower its cash rate by 25 bps to a record low of 0.5% to provide additional support to employment and economic activity. RBA Governor Philip Lowe warned that growth will probably be lower than previously estimated and said the bank is prepared to ease monetary policy further if needed. The move was followed by a cut of 50 bps by the Fed, which lifted AUD/USD in over a week during the New York session.
AUD/USD short-term technical outlook
AUD/USD short-term technical view has improved according to indicators in the 4-hour chart, although the longer-term perspective remains bearish. The pair trades just below a descending 20-day SMA, which offers significant resistance at the 0.6650 area. A break here would be a positive signal and could pave the way to the 0.6710 zone. On the downside, the 0.6500 psychological level might offer some support ahead of the 11-year low of 0.6433.
Support levels: 0.6433 0.6400 0.6344
Resistance levels: 0.6650 0.6710 0.6750
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.
