AUD/USD Forecast: Scope for more gains while above 0.6570
AUD/USD Current Price: 0.6604
- US Dollar weakens as Treasury yields decline.
- Australia to release Retail Sales data, and RBA Governor Bullock is scheduled to speak; additionally, several Fed officials are also due to speak.
- The AUD/USD is testing levels above the 200-day SMA and the 0.6600 mark.
The AUD/USD rose above 0.6600 for the first time since early August. Despite trading at multi-month highs, the pair shows potential for further gains as the US Dollar remains under pressure.
The Reserve Bank of Australia (RBA) has appointed a new Deputy Governor, Andrew Hauser, for a five-year term. He is the first foreigner to hold that position. Reports suggest that the government will present legislation to make changes to the central bank based on the recommendations of the independent review. These changes may include a dual mandate and the elimination of the Treasury's power to overrule RBA decisions.
On Tuesday, Australia will release Retail Sales data, which is expected to show a 0.1% increase in October following a 0.9% gain in September. RBA Governor Michele Bullock will participate in a panel at an event in Hong Kong titled "Inflation, Financial Stability, and Employment." No surprises are expected from her following last week's comments.
The AUD/USD rose for the third consecutive day and remains supported by a weaker US Dollar. Treasury yields are approaching monthly lows. The DXY (US Dollar Index) posted its lowest daily close since August. Equity markets opened the week with mixed results.
AUD/USD short-term technical outlook
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The AUD/USD rose on Monday for the third consecutive day. It climbed above 0.6600 and also surpassed the 200-day Simple Moving Average (SMA) for the first time since July. The 0.6600 mark is a significant technical level, and above that, the bullish momentum prevails. Technical indicators on the daily chart support the upside, with the Relative Strength Index (RSI) approaching 70 and key SMAs turning upwards.
On the 4-hour chart, the pair continues to move higher. However, there are mixed signals from technical indicators. Nevertheless, as long as it remains above the 20-SMA and relevant horizontal support at 0.6570, further highs are likely. The next strong resistance stands at 0.6640. On the flip side, if the price falls below 0.6570, an extension of the correction seems likely.
Support levels: 0.6600 0.6570 0.6545
Resistance levels: 0.6615 0.6640 0.6655
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Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
