AUD/USD Forecast: Near-term rebound hinges on US Payrolls

The selling pressure remained unabated around the Aussie dollar for yet another session on Thursday, this time prompting AUD/USD to put the 0.6700 support to the test.

In fact, the pair failed to regain balance in spite of auspicious prints from the Chinese services sector, as per the Caixin PMI for the month of December, while the vacillating price action surrounding the greenback did nothing to lend some much-needed oxygen to the high-beta currency.

Also contributing to the bearishness around the pair emerged another negative session in the commodity complex in spite of the recovery to multi-month tops of iron ore prices, which approached the $145.00 region per tonne.

At present, the Australian dollar is expected to be influenced by several key factors in the upcoming weeks. These factors include the actions of the Fed and the potential for interest rate cuts, potentially as early as Q2, with March being a possibility. Additionally, the performance and recovery of the Chinese economy in the post-pandemic era will also play a significant role. All of these factors will unfold against the backdrop of the RBA maintaining its current stance.

In the very near term, AUD/USD is predicted to closely follow the release of the US labour market report for the month of December, due on Friday. On this, Nonfarm Payrolls are expected to increase by 150K jobs, and the Unemployment Rate is seen to be higher at 3.8% in the last month of 2023.

AUD/USD short-term technical outlook

Further AUD/USD decline should leave the 0.6700 support behind, putting a potential visit to the important 200-day SMA at 0.6582 back on the table. Prior to the December 2023 low of 0.6525 (December 7), the loss of this area should face a temporary support at the 55-day SMA at 0.6561. If bulls recover control, the focus is anticipated to transfer to the December 2023 high of 0.6871 (December 28) ahead of the 0.6900 zone, which coincides with the June and July tops. Once the pair clears this range, the psychological 0.7000 level will be the next to watch.

A look at the 4-hour chart reveals the significant conflict region to be around 0.6700. Once breached, spot might return to the 0.6663 level before moving on to another strong support at the 200-SMA at 0.6657. The MACD is still in the red zone, while the RSI is flirting with the oversold territory. The resurgence of the bullish trend could encounter an initial resistance around the 55-SMA at 0.6790, which is seen as the last line of defense before previous high around 0.6870.

View Live Chart for the AUD/USD