- Despite falling on Friday, AUD/USD is up 1.34% on the week.
- Sentiment moved negative in the last hour, dragging AUD/USD lower.
- AUD/USD Price Forecast: A daily close below the 20-DMA could pave the way for the all-time low below 0.6850.
The AUD is fighting against the 20 day moving average (DMA) and is losing the battle as the AUD/USD expects to resume the prevailing downtrend as the 50 DMA crosses below the 100 DMA, further confirming the bias. At 0.7030, AUD/USD reflects USD strength as sentiment has turned sour.
Sentiment fluctuated negative in the last hour, dragging AUD/USD lower
Earlier in the day, Wall Street opened higher, influenced by the positive sentiment carried over from the Asian and European sessions. The People’s Bank of China (PBoC) interest rate cut for the 5-year prime lending rate (LPR) from 4.60% to 4.45% was welcomed by investors, a sign that the Chinese authorities would continue to supporting the economy, despite Covid-19 zero tolerance restrictions. However, the mood changed in the last hour.
Over the week, the Australian dollar benefited from positive employment data, despite the Wage Price Index (WPI) rising below estimates. However, full-time employment beat expectations, and the unemployment rate fell, pushing AUD/USD above 0.7070, weekly highs.
On Friday, the story is different, as risk aversion, which has manifested itself since FX traders ignored Thursday, is taking its toll on AUD/USD, causing the major currency to drop below the DMA of 20 and threatens to open the door for a move towards 0.7000.
In the US, an absent economic docket, witnessed earlier in the week by several statements from Fed members, is not doing much for the USD, which is strengthening in the session, as reflected by the US dollar index, which has risen 0.26% and has broken back above the 103,000 level.
AUD/USD Price Forecast: Technical Outlook
AUD/USD continues to have a bearish bias, despite Thursday’s rally which saw the pair break out of the 0.7050 towards weekly highs. A Friday daily close below the 20-DMA at 0.7039 would expose the major to selling pressure.
Therefore, the path of least resistance from the major continues to the downside. The first support of the AUD/USD would be 0.7000. A break below would expose the 0.6900 level, followed by the lower band of the Bollinger Band indicator at 0.6850, and then the year low at 0.6828.
|Last Price Today||0.7042|
|Today’s Daily Change||-0.0006|
|Today’s Daily Change %||-0.09|
|Today’s Daily Opening||0.7048|
|20 Daily SMA||0.7053|
|50 Daily SMA||0.7279|
|100 Daily SMA||0.7238|
|200 Daily SMA||0.7264|
|Previous Daily High||0.7073|
|Previous Daily Minimum||0.6952|
|Previous Maximum Weekly||0.7074|
|Previous Weekly Minimum||0.6828|
|Monthly Prior Maximum||0.7662|
|Previous Monthly Minimum||0.7054|
|Daily Fibonacci 38.2%||0.7027|
|Daily Fibonacci 61.8%||0.6998|
|Daily Pivot Point S1||0.6976|
|Daily Pivot Point S2||0.6903|
|Daily Pivot Point S3||0.6854|
|Daily Pivot Point R1||0.7097|
|Daily Pivot Point R2||0.7146|
|Daily Pivot Point R3||0.7219|
Source: Fx Street