AUD/USD outlook: Australian Dollar loses ground on weak China's inflation data, higher US Dollar

Slobodan Drvenica Windsor Brokers

AUD/USD

Australian dollar lost ground and declined almost 1.2% until the start of US session on Thursday, hit by weaker than expected China’s April inflation data.

US weekly jobless claims rose well above consensus and reached the highest since Oct 2021, adding to worries that higher interest rates were starting to hurt labor market and lifted the US dollar.

Fresh acceleration lower broke through pivotal support at 0.6724 (200DMA / Fibo 38.2% of 0.6573/0.6818 recovery leg), adding to initial negative signal on bull-trap above 100DMA (0.6790).

Bears look for a verification on daily close below 0.6724 level and further retracement of 0.6573/0.6818 advance, with break through next key support at 0.6695 (daily Kijun-sen / base of thick daily Ichimoku cloud) to generate fresh bearish signal and further weaken near-term structure, as daily studies are still mixed.

Caution on failure to register close below 200DMA and possible bounce, which would point to a healthy correction of 0.6573/0.6818 and keep alive hopes for fresh push higher.

Res: 0.6724; 0.6760; 0.6790; 0.6818.
Sup: 0.6695; 0.6667; 0.6631; 0.6591.

Interested in AUD/USD technicals? Check out the key levels

1. R3 0.6891
2. R2 0.6855
3. R1 0.6817
PP 0.6781
1. S1 0.6743
2. S2 0.6707
3. S3 0.6669

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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