AUD/USD Forecast: The 0.6700 area still critical, Australian data in focus

Matías Salord FXStreet

AUD/USD Current Price: 0.6740

A mixed session in Wall Street and in the global bond market, kept AUD/USD mostly in ranges.
Key Australian economic data ahead includes growth and inflation; Chinese PMIs also due on Wednesday.
AUD/USD holds above the critical 0.6700 threshold without much bullish conviction.

The AUD/USD pair heads into March moving below the 0.6750 price zone after being able to trade all Tuesday above 0.6700. The Aussie rose marginally after Australian Retail Sales showed a solid 1.9% increase in January, surpassing the 1.5% of market consensus and recovering after the 4% slide of December. A weaker US Dollar helped the pair remain above 0.6700 despite some deterioration in market sentiment. The Kiwi outperformed the Aussie, with AUD/NZD falling to a five-week low under 1.0900.

Key economic data is due on Wednesday in Australia. First on the docket will be the PMIs for January, followed by Q4 GDP growth (estimate 0.8%) and the Monthly Consumer Price Index, with the annual rate expected to drop from 8.4% to 8%. Analysts will look closely at inflation, growth and wage indicators to use them as input for their expectations about monetary policy.

AUD/USD short-term technical outlook

The AUD/USD pair is about to post another daily close around the 0.6730/40 area, after being able to hold above 0.6700 and the 100-day Simple Moving Average (SMA) while, at the same time, unable to break the 0.6750 resistance. A firm breakout below 0.6700 would increase the bearish pressure, favoring more losses, in line with the current trend.

The 4-hour chart shows some weak positive signs for the Aussie, with RSI and Momentum moving north. However, AUD/USD pulled back under the 20-SMA (currently at 0.6747) after briefly trading above it. The price is still moving south, just like the 100 and 200 SMAs. If the pair manages to break and hold above 0.6750, more gains seem likely. A recovery above 0.6800/10 (horizontal resistance and short-term downtrend line) would add support to the Aussie for a stronger recovery.

Support levels: 0.6700 0.6655 0.6615

Resistance levels: 0.6755 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.

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