AUD/USD Forecast: Bearish Case To Become Firmer On A Break Below The 0.7170 Support Level

AUD/USD Current Price: 0.7203

• Australian Westpac Leading Index contracted to 0.05% in July, indicated broad-based weakness.
• AUD/USD bearish case to become firmer on a break below the 0.7170 support level.

The AUD/USD pair surged to 0.7275, a fresh yearly high, but ended up losing the 0.7200 level in the final hours of trading. Australian data released at the beginning of the day disappointed, as the Westpac Leading Index came in at 0.05% in July, down from 0.5% in the previous month, indicating broad-based weakness in the local economy. The six-month annualized growth rate in the index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, rose to -4.37%  in July from -4.43% in June.

Once again, however, the market was all about the greenback. Demand for the American currency surged during US trading hours, later exacerbated by the Federal Reserve’s Minutes. Australia won’t release relevant macroeconomic data this Thursday.

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AUD/USD short-term technical outlook

The AUD/USD pair is heading into the Asian opening trading around the 0.7200 level, and it’s at risk of falling further. The 4-hour chart shows hat it has fallen below a bullish 20 SMA, while technical indicators head south almost vertically, challenging their midlines. The 100 SMA stands at around 0.7175, while the pair has some intraday highs and lows in the same area. Bears will likely took their chances on a break below it.

Support levels: 0.7170 0.7135 0.7090

Resistance levels: 0.7245 0.7280 0.7325

View Live Chart for the AUD/USD