AUDUSD Forecast: Growth-related data to define next directional move

AUD/USD Current Price: 0.6641

• RBA Governor Philip Lowe reiterated the central bank is not on a pre-set path.
• Australian S&P Global PMIs are expected to show a steeper economic downturn in November.
• AUD/USD is neutral in the near term, but bulls have chances as long as 0.6585 holds.

The AUD/USD pair trades around 0.6640 at the end of the American session, up modest 50 pips on Tuesday. The pair made most of its intraday progress during European trading hours, holding steady in the US session despite the better tone of Wall Street and steady US Treasury yields. US indexes were firmly up after starting the week on the back foot, while the yield on the 10-year Treasury note ticked lower and currently stands at around 3.75%.  

Reserve Bank of Australia Governor Philip Lowe offered a speech titled “Price Stability, the Supply Side and Prosperity” and commented on the central bank’s monetary policy. Lowe reiterated that the central bank is not on a pre-set path and could either resume outsize hikes or pause. What he made clear without a doubt is that the RBA expects to raise the rate further over the period ahead.

Australia will release early on Wednesday the preliminary estimates of the November S&P Global PMIs. Manufacturing activity is expected to have contracted to 52.4 from the previous 52.7, while services output is foreseen at 49.1, down from 49.3 in October. It is worth adding that the Reserve Bank of New Zealand will announce its monetary policy decision and is expected to hike the main rate by 75 bps to 4.25%.  

AUDUSD short-term technical outlook

From a technical point of view, the AUD/USD pair daily chart shows that it is trading below a mildly bearish 100 SMA while above a bullish 20 SMA, the latter providing dynamic support at around 0.6540. The Momentum indicator turned higher near overbought readings, while the RSI indicator hovers around 56, falling short of supporting and advance but indicating absent selling interest.

In the near term, and according to the 4-hour chart, the pair is neutral. It trades a handful of pips below a flat 20 SMA while the longer moving averages continue to advance below the current level. Technical indicators, in the meantime, remain directionless below their midlines. The pair bottomed on Monday at 0.6584, with a slide below it opening the door for a steeper decline.

 Support levels: 0.6630 0.6585 0.6550

Resistance levels: 0.6670 0.6710 0.6745

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