AUD/USD Forecast: Underpinned by a better market mood

AUD/USD Current Price: 0.6760

• The Australian Dollar benefited from upbeat local data, raising US equities.
• Chinese inflation will take center stage during the upcoming Asian session.
• AUD/USD is poised to extend its advance in the near term, eyes on 0.6850.

The AUD/USD trades at around 0.6760, up for a second consecutive day. The Australian Dollar benefited at the beginning of the day from better-than-anticipated local data, as the October Trade Balance posted a larger-than-anticipated surplus of $A12.21 billion. Market players were anticipating a modest $A1.15 billion.

The pair got another boost early in the American session, as Wall Street managed to open with gains. US indexes temporarily retreated after the opening, but quickly resumed their advances. Investors lost interest following the US opening, and major pairs spent most of the session consolidating.

On Friday, Australia will not publish macroeconomic data, with the focus on China. The country will publish its November Consumer Price Index, foreseen up by 1% YoY, and the Producer Price Index for the same period is foreseen up by 4.6%.

AUDUSD short-term technical outlook

The daily chart for the AUD/USD pair supports a bullish extension, as the pair remained above a bullish 100 SMA, which advances above a flat 100 SMA. The 200 SMA, in the meantime, maintains its modestly bearish slope above the current level. At the same time, technical indicators picked up, heading modestly higher within positive levels, in line with further gains ahead.

In the near term, and according to the 4-hour chart, chances are also on the upside. The 20 SMA has lost its bearish strength and turned flat, converging with the 100 SMA at around 0.6720. The 200 SMA heads firmly north far below the current level, while technical indicators lack directional strength, but remain within positive levels.

Support levels: 0.6720 0.6670 0.6610

Resistance levels: 0.6815 0.6850 0.6890

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