AUD/USD Forecast: A test of 0.6900 on the table
AUD/USD Current Price: 0.6810
- Chinese data indicated a steeper economic downturn in December.
- Sentiment will likely lead the way after the New Year holiday.
- AUD/USD holding near its recent highs, with more gains in the docket.
The AUD/USD pair is up for a sixth consecutive day, currently trading in the 0.6810 price zone, not far from Friday’s high at 0.6820. The Australian Dollar advanced against its American rival, despite dull market conditions. Most Asian and European indexes remained closed amid the New Year holiday, with those actually opening posting modest intraday gains.
Furthermore, Chinese data released over the weekend came in worse than anticipated. On Saturday, the country published the December NBS Manufacturing PMI, which contracted to 47 from 48 in the previous month, while the Non-Manufacturing index in the same period plummeted to 41.6 from 46.7 in November. The upsurge in coronavirus cases in China continues to take its toll on economic progress, despite the local government dropping its zero-covid policy.
Early on Tuesday, S&P Global will release the Australian December Manufacturing PMI, expected to be confirmed at 50.4, and the Chinese Caixin Manufacturing PMI for the same month, foreseen at 48.8. Australia will also publish the December RBA Commodity Index SDR.
AUDUSD short-term technical outlook
The AUD/USD pair has room to extend its advance, despite the absence of momentum more linked to the holiday season. The daily chart shows that the pair is above a flat 20 SMA, while the 100 SMA maintains its bearish slope over 200 pips below the current level. The 200 SMA, in the meantime, also heads lower but above the current level, providing dynamic resistance at around 0.6860. Finally, technical indicators stand within positive levels, the Momentum heading higher and the RSI consolidating at around 59.
The 4-hour chart shows that AUD/USD develops above bullish moving averages, with the 20 SMA accelerating north above the longer ones. Technical indicators, however, have lost their early upward strength and hold near their intraday highs well above their midlines. Overall, the risk skews to the upside, with a break below 0.6750 required to deny a near-term continuation.
Support levels: 0.6795 0.6750 0.6715
Resistance levels: 0.6820 0.6860 0.6900
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Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
