AUD/USD Forecast: Stronger Dollar keeps price near crucial support
AUD/USD Current Price: 0.6718
- The US Dollar rose on Thursday amid higher US yields and inflation concerns.
- Aussie keeps lagging, not favored by Australian economic data, RBA meeting looms.
- AUD/USD remains in range, near the critical 0.6700 area.
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The AUD/USD dropped on Thursday on a relatively quiet session across the FX board amid a stronger US Dollar. The pair is back near a critical level as the Greenback receives support from higher US yields while US economic data continues to point to a tight labor market. A mixed session in Wall Street favored limited price action, with inflation concerns and higher yields dominating market sentiment.
In Australia, Building Permits fell by 27.6% in January, much more than the 9% slide expected, to the lowest level since July 2012. The numbers added to Wednesday’s GDP that came below expectations. The mixed figures are not helping the Aussie that remains among the worst performers of the week. AUD/NZD managed to stabilize around 1.0800 after losing more than a hundred pips in two days.
Australian data on the docket for Friday: February S&P Global Service and Composite PMIs (final) and January Home Loans. Attention is turning toward next week’s Reserve Bank of Australia (RBA) meeting. The central bank is expected on Tuesday to raise the key rate by 25 basis points.
AUD/USD short-term technical outlook
The AUD/USD constantly dropped throughout Thursday, showing no signs of exhaustion ahead of the Asian session. It is approaching the 0.6700 area, which continues to be a critical support zone. A consolidation below would mark the end of a four-day trading range, suggesting more losses, initially targeting 0.6670. Below, attention would turn to the December low at 0.6630.
Risks in the short-term are tilted to the downside, and technical indicators on the 4-hour chart suggest that a challenge of 0.6700 seems likely during the next hours. A recovery above the flat 20 Simple Moving Average, at 0.6740, would alleviate the bearish pressure, keeping AUD/USD off the hook.
Support levels: 0.6700 0.6665 0.6630
Resistance levels: 0.6740 0.6785 0.6810
View Live Chart for the AUD/USD
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Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
