AUD/USD Forecast: More gains in the docket, watch out for a break above 0.7100

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.7051

Equities remained under selling pressure, reflecting persistent market concerns.
Australian employment data was much worse than anticipated in April.
AUD/USD has turned bullish and faces critical Fibonacci resistance at 0.7100.

The AUD/USD pair posted a strong comeback on Thursday, ending the day in the 0.7050 price zone. The broad dollar’s weakness was behind the advance, as the aussie had no reasons to strengthen. Australia published its April employment figures at the beginning of the day, which resulted much worse than anticipated. The country added just 4K new jobs in the month, while the Unemployment Rate held steady at 3.9%, despite the Participation Rate coming down to 66.3%.

Furthermore, Asian and European indexes closed mostly in the red, although off their intraday lows. US indexes ended mixed, with the Dow Jones Industrial Average ending in the red. On a positive note, gold prices were up, with spot trading above $1,840 a troy ounce, providing support to the aussie.

Neither Australia nor the US will publish relevant macroeconomic data on Friday.

AUD/USD short-term technical outlook

The AUD/USD pair has broken above the 50% retracement of its latest daily slump between 0.7265 and 0.6828 at 0.7045, now immediate support. THE daily chart shows that the pair is now battling around a bearish 20 SMA, while technical indicators maintain their bullish slopes, aiming to enter positive territory. The next Fibonacci level comes at 0.7095, with additional gains likely on a break above it.

According to the 4-hour chart, AUD/USD is neutral-to-bullish. It is comfortable above its 20 and 100 SMAs, with the shorter one advancing below, the longer ones. The 200 SMA, in the meantime, keeps heading south well above the current level. In the same chart, technical indicators have lost their directional strength but hold within positive levels. Given that the pair remains near its daily high, the risk is skewed to the upside.

Support levels: 0.7045 0.7000 0.9650

Resistance levels: 0.7095 0.7130 0.7175

View Live Chart for the AUD/USD

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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.

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