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.

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