AUD/USD Forecast: Poised to break the critical 0.7000 threshold

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.7057

Australian inflation beat expectations in Q3 but fell short of underpinning the AUD.
Market participants expect the RBA to expand its government bond purchases next week.
AUD/USD maintains a bearish stance in the near term, could fell sub-0.7000.

The AUD/USD pair surged at the beginning of the day, reaching 0.7156 following the release of Australian Q3 inflation figures. The RBA Trimmed Mean CPI surged 0.4% in Q3 and increase D1.2% when compared to a year earlier, beating the market’s expectations. Aussie’s momentum, however, was short-lived, overshadowed by risk-aversion. Even further, the commodity-linked currency got hit by headlines suggesting the RBA is likely to expand government bond purchases by about AUD100 billion when it meets next week. This Thursday, Australia will publish the Q3 NAB’s Business Confidence, previously at -15.

AUD/USD short-term technical outlook

The AUD/USD pair gave up on resurgent demand for the American currency, falling to 0.7037 and finishing the day a handful of pips above this last. The 4-hour chart indicates that the slide may continue, as the pair plunged after breaking below all of its moving averages. Technical indicators have partially lost their bearish momentum but hold near oversold readings. The immediate support level is 0.7030, with a break below it favoring an extension sub-0.7000.

Support levels: 0.7030 0.6990 0.6950

Resistance levels: 0.7070 0.7110 0.7160

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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