AUD/USD Forecast: Bearish on a break below 0.6865
|AUD/USD Current Price: 0.6889
- A trade deal between the US and China likely to limit the downside for the pair.
- Australia will release the preliminary estimates of the December PMI.
- AUD/USD retreated sub-0.6900 but holds above the critical 0.6865 support.
The AUD/USD pair surged on Friday to its highest in over 4-month, printing 0.6938 before retreating. The early momentum was the result of UK PM Johnson´s victory and hopes for a US-China trade deal. The agreement was announced by the end of the US session, boosting the greenback and dragging the pair sub-0.6900. Nevertheless, it closed with gains for a second consecutive week, and risk-appetite should keep the downside limited even in the case of dollar’s persistent strength.
This Monday, Australia will release the preliminary December Commonwealth Bank Manufacturing PMI, foreseen at 50.4 from the previous 49.9, and the Services PMI, expected at 49.1 from 49.7 previously. China will publish November Industrial Production expected to have risen by 5.0% and Retail Sales for the same month, seen up by 7.6%.
AUD/USD short-term technical outlook
The daily chart for the AUD/USD pair shows that it failed to hold ground above a bearish 200 SMA, this last around 0.6905. The 20 DMA is barely above the 100 DMA, both around 0.6800, lacking clear directional strength. Technical indicators have retreated from overbought readings, suggesting the pair may have hit an interim top, to be confirmed if the current decline continues sub-0.6865 a former relevant resistance level. In the 4-hour chart, the pair stalled its decline around a bullish 20 SMA, which remains above the larger ones, while technical indicators retreated sharply from overbought readings to stabilize in neutral levels, falling short of confirming a downward movement ahead.
Support levels: 0.6865 0.6830 0.6800
Resistance levels: 0.6900 0.6935 0.6970
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.