AUD/USD Forecast: Recovered Above The 0.7700 Level But Has Room To Extend Its Decline

2 mins read

AUD/USD Current Price: 0.7710

  • Australian encouraging data fell short of supporting the aussie.
  • Demand for the American dollar receded mid-US session.
  • AUD/USD recovered above the 0.7700 level but has room to extend its decline.

The Australian dollar started the week on the wrong footing, easing against its American rival to 0.7665. Demand for the greenback and a sour market mood undermined AUD/USD, which anyway managed to regain the 0.7700 threshold ahead of the US close. Australian data released at the beginning of the day was generally encouraging, as November Retail Sales were upwardly revised to 7.1%. Also, December TD Securities inflation improved from 1.3% to 1.5% YoY, while the monthly reading came in at 0.5%.

However, the poor performance of equities undermined the pair, alongside extreme overbought conditions after it advanced for the eighth consecutive weeks. Australia won’t publish relevant macroeconomic data this Tuesday.

AUD/USD Short-Term Technical Outlook

The AUD/USD pair has limited bullish potential in the near-term, and the corrective decline has room to continue. The 4-hour chart shows that the 20 SMA has turned lower above the current level, but also that the longer ones maintain their bullish slopes below the daily low. Technical indicators recovered from intraday lows, but lost their bullish strength and develop within negative levels. Renewed selling pressure below 0.7670 should favor a decline toward the 0.7580 region.

Support levels: 0.7670 0.7620 0.7580

Resistance levels: 0.7720 0.7770 0.7815

View Live Chart for the AUD/USD

© 2021 Benzinga does not provide investment advice. All rights reserved.