• The Australian dollar slides from weekly highs above 0.7200 amidst a sour trading day.
  • Sentiment shifted negatively as month-end flows boosted the greenback, and US Treasury yields rose.
  • AUD/USD Price Forecast: A daily close below 0.7200 to open the door for further losses.

AUD/USD slumps in the North American session, dropping from weekly highs above 0.7200, spurred by a risk-off market mood, on May’s last trading day. At 0.7178, the AUD/USD reflects the greenback’s strength, benefitted by month-end flows and higher US Treasury yields.

US equities remain trading with losses, between 0.46% and 1.80%. Sentiment shifted sour as the Eurozone reported inflation for May, which increased by 8.1% YoY, higher than the 7.8% foreseen, triggering worries about elevated prices and a global stagflation scenario.

In the Asian session, positive news from China showed that May PMIs came better than expected. The Manufacturing PMI printed a solid 49.6, higher than the 49.0 expected. The Non-Manufacturing PMI index rose by 47.8 vs. 45.5 estimations. The previously mentioned, alongside some restrictions lifted in Beijing and Shanghai, paint a hopeful scenario for the second-largest economy and Australia’s largest trading partner.

Chinese data boosted the AUD/USD, which was suffering under some selling pressure, though in the end, it failed to cling to the 0.7200 mark.

On Monday, Fed’s Governor Christopher Waller said he wants to keep hiking rates in 50 bps size until inflation is moving back towards the 2% target. Specifically, he said, “I support tightening policy by another 50 bps for several meetings. In particular, I am not taking 50 bps hikes off the table until I see inflation coming down closer to our 2% target.”

In the day ahead, the Australian economic docket would feature the GDP for Q1. Along with China’s Caixin Manufacturing PMI for May, that data could influence the AUD/USD direction. On the US front, the US economic calendar would feature the US ISM Manufacturing and Non-Manufacturing PMIs, US employment data, led by the Nonfarm Payrolls, and the ADP and JOLTs openings report.

AUD/USD Price Forecast: Technical outlook

The AUD/USD daily chart depicts the pair as neutral-downward biased. Above the 0.7200 mark, AUD/USD buyers would face a firm supply area in the 0.7229-56 region, the confluence of the 50, 100, and the 200-day moving averages (DMAs), a reason for the pair’s dip below 0.7200, as AUD/USD bears stepped in.

If the AUD/USD records a daily close below the 0.7200 mark, that will open the door for further weakness. That said, the AUD/USD first support would be the May 30 low at 0.7152. Once that hurdle cleared, the AUD/USD would tumble towards 0.7100, followed by the 50-day moving average (DMA) at 0.7050.

On the other hand, the AUD/USD first resistance would be 0.7200. A breach of the latter would expose the major to the 0.7229.56 area, the confluence of the above-mentioned DMAs.

AUD/USD

Overview
Today last price 0.7178
Today Daily Change -0.0016
Today Daily Change % -0.22
Today daily open 0.7196
 
Trends
Daily SMA20 0.7049
Daily SMA50 0.7252
Daily SMA100 0.7232
Daily SMA200 0.7259
 
Levels
Previous Daily High 0.7201
Previous Daily Low 0.7166
Previous Weekly High 0.7167
Previous Weekly Low 0.7034
Previous Monthly High 0.7662
Previous Monthly Low 0.7054
Daily Fibonacci 38.2% 0.7188
Daily Fibonacci 61.8% 0.718
Daily Pivot Point S1 0.7175
Daily Pivot Point S2 0.7153
Daily Pivot Point S3 0.714
Daily Pivot Point R1 0.7209
Daily Pivot Point R2 0.7222
Daily Pivot Point R3 0.7244

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD turns south towards 1.0150 ahead of EU GDP, Fed minutes

EUR/USD turns south towards 1.0150 ahead of EU GDP, Fed minutes

EUR/USD has come under renewed selling pressure below 1.0200 amid broad risk-aversion. The US dollar rebounds ahead of Fed minutes while the euro awaits Eurozone GDP. The shared currency remains weighed down by recession fears and gas crises.

EUR/USD News

GBP/USD drops below 1.2100 amid risk-aversion

GBP/USD drops below 1.2100 amid risk-aversion

GBP/USD is falling below 1.2100 in the European session on Wednesday as investors assess the implications of surging UK inflation on the BOE's next policy move. The US dollar finds demand amid souring risk sentiment ahead of US data and Fed minutes. 

GBP/USD News

Gold’s battle with 50 DMA extends ahead of Fed minutes

Gold’s battle with 50 DMA extends ahead of Fed minutes

Gold price rebounds from weekly lows as the USD resumes correction. US Treasury yields are struggling to find demand ahead of the Fed minutes. XAU/USD needs acceptance above 50 DMA to sustain the recovery.  

Gold News

Solana price hints at a 50% upswing under these specific conditions

Solana price hints at a 50% upswing under these specific conditions

Solana price shows an interesting setup as it tries to overcome a stiff resistance level. The fifth attempt to overcome hurdles will likely be successful due to multiple bullish confluences. Solana price has been on a clear uptrend since producing the June 14 swing low at $25.76.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures