AUD/USD Forecast: No respite for the Aussie in a risk-averse environment

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6511

Better than expected, US data maintained the Greenback on the winning side.
Australian Retail Sales expected to post a modest 0.2% advance in April.
AUD/USD briefly pierced 0.6500, trades nearby with a bearish stance.

The Australian Dollar fell for a third consecutive day against its American rival, and AUD/USD traded as low as 0.6498, last seen in November 2022. It hovers around the 0.6500 threshold, sharply down for a third consecutive day. The Australian Dollar fell alongside global equities, reflecting mounting concerns about the United States' (US) health.

On the one hand, President Joe Biden and lawmakers continue discussing an extension of the debt ceiling. Republicans are asking the President for spending cuts, with the latest on the matter indicating a $ 70 billion discretionary spending being the issue to solve to clinch a deal. On the other, US data was upbeat, with the country revising the pace of annualized growth to 1.3% in the first quarter of the year. The FOMC Meeting Minutes released on Wednesday show that some policymakers count on an economic slowdown to pause monetary tightening. A better-than-anticipated GDP figure would allow the Federal Reserve (Fed) to hike rates one or two more times before pausing.

Early on Friday, Australia will publish April Retail Sales, seen up a modest 0.2% MoM. Later in the day, the US will release April Durable Goods Orders and the Personal Consumption Expenditures Price Index for the same month.

AUD/USD short-term technical outlook

The daily chart for the AUD/USD pair hints at lower lows ahead. The pair is developing below bearish moving averages, with the 20 Simple Moving Average (SMA) currently at 0.6664. Technical indicators, in the meantime, head south almost vertically, nearing oversold levels but still supporting another leg lower.

In the near term, and according to the 4-hour chart, the pair is correcting extreme oversold conditions, although a firmer recovery is out of the picture for now. AUD/USD trades far below a bearish 20 SMA, which head south almost vertically and stands roughly 80 pips above the current level. Finally, the 100 SMA is crossing below the 200 SMA both at around 0.6670.

Support levels: 0.6490 0.6450 0.6410

Resistance levels: 0.6545 0.6590 0.6625

View Live Chart for the AUD/USD

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.

AUD/USD sits at three-week highs above 0.7000 on hawkish RBA-speak

AUD/USD holds a positive bias for the fourth straight day, trading above 0.7000 in the Asian session on Wednesday and at three-week highs. RBA Deputy Governor Andrew Hauser's hawkish remarks and inflation concerns underpin the pair. However, the upside appears capped as the US Dollar attracts some buyers amid looming US-Iran uncertainty.

USD/JPY remains confined in a familiar range below 158.50

USD/JPY sees some dip-buying in the Asian session on Wednesday, though it remains confined within a multi-week range near 158.50 as the uncertainty over the timing of the next BoJ rate hike keeps Japanese Yen bulls on the defensive. Meanwhile, hawkish Fed expectations, bolstered by inflation risks stemming from volatile oil prices, underpin the US Dollar. However, looming intervention fears could limit JPY losses and cap the currency pair.

Gold extends losing spree as US bond yields hold ground

Gold maintains an offered tone heading into the European session, trading near the weekly low it touched earlier this Wednesday, with bears still awaiting a sustained break and acceptance below $4,100 before positioning for further losses. Inflation risks stemming from volatile oil prices underpin prospects for further policy tightening by the US Federal Reserve. Furthermore, a modest US Dollar bounce from a near three-week low is seen weighing on the bullion.

Zcash's bullish reversal eyes $1,698 peak on NU7 upgrade

Zcash (ZEC) shows signs of bullish recovery above $1,200 on Wednesday, following a 9% rebound the previous day linked to the upcoming NU7 upgrade. Blockworks released a Zcash holders report on Tuesday, highlighting steady network growth. The technical outlook for ZEC is bullish, with bulls eyeing an extended rally toward $1,698.

US – Midterm update: Pre-election tail risk scenarios

With two weeks until the US midterm elections on 3 November, early voting has already opened in more than 40 states. Prediction markets are broadly unchanged since we published our Midterm update, 13 October. The prediction market Polymarket continues to see Democrats winning both chambers as the most likely outcome, with a 62.5% probability.

The US Dollar fell. Gold didn't rally. That tells you everything

Gold (XAU/USD) is struggling to capitalize on a weaker US Dollar (USD), after repeatedly failing to establish itself above the $4,200 level. The precious metal remains confined to a relatively narrow trading range despite a combination of developments that would normally support higher prices.