AUD/USD Forecast: Recovery from decade-low might be limited

Valeria Bednarik FXStreet

Current Price: 0.6615

AUD/USD extends bounce from 11-year low, but technical view not that optimist.
Australian GDP data beats expectations and helps the AUD.

AUD/USD advanced for a third consecutive day on Wednesday, extending its recovery from an 11-year low struck on Friday, lifted by better market sentiment after the Federal Reserve and the Reserve Bank of Australia lowered borrowing costs to boost economic growth. During the Asian session, data published by the Australian Bureau of Statistics showed the economy grew by 2.2% on a yearly basis in the fourth quarter, beating expectations of a 1.9% increase.

AUD/USD short-term technical outlook

Following three days of gains, the AUD/USD short-term technical perspective has improved. However, the longer-term bias remains bearish, with daily indicators in the negative ground while the pair holds near a decade low. The Australian dollar needs a clear break above the 0.6635-40 zone, – where a descendent trend line coming from December’s high converges with the 20-day SMA – to ease the immediate pressure and approach the 0.6700 area. On the downside, the 0.6500 area could offer some support ahead of the mentioned low at 0.6433. Should it give up, AUD/USD could be up for a visit to January’s 2009 low at 0.6344.

Support levels: 0.6500 0.6433 0.6400

Resistance levels: 0.6635 0.6700 0.6750

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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