AUD/USD Forecast: Bearish Potential To Increase On A Break Below 0.6840

  • Australia could have lost 125K job positions in May, after shedding 594.3K in April.
  • The Australian Westpac Leading Index improved to 0.19% in May from -1.47% in the previous month.
  • AUD/USD bearish potential to increase on a break below 0.6840.

The AUD/USD pair has spent the day consolidating just ahead of the 0.6900 figure, with the bullish potential limited by mixed Australian data released at the beginning of the day. The May Westpac Leading Index improved to 0.19% from -1.47% in the previous month. HIA New Home Sales fell in April by 4.2% after printing -1.1% in the previous month. Meanwhile, most global indexes posted modest intraday gains, limiting chances of a decline.

This Thursday, Australia will release May employment data. The country is expected to have lost 125K job positions, an “improvement” from the previous -594.3K. The unemployment rate is foreseen ticking higher to 7% from 6.2% in April, while the participation rate is foreseen at 63.7%.

AUD/USD short-term technical outlook

The AUD/USD pair is trading around 0.6890, neutral-to-bullish ahead of the all-important employment report. The 4-hour chart shows that it has spent the day above a flat 20 SMA, while the larger moving averages head higher below the current level. Technical indicators have turned modestly lower, the Momentum within positive levels, while the RSI is in neutral levels. The risk of a bearish extension would be linked to a negative surprise from employment figures and a break below 0.6840, a strong static support level.

Support levels: 0.6875 0.6840 0.6795

Resistance levels: 0.6935 0.6980 0.7020

View Live Chart for the AUD/USD

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