AUD/USD Forecast: Could Correct Lower, But Buyers Ready To Add At Lower Levels

AUD/USD Current Price: 0.6930

• Australian data in-line with the market’s forecast pushed the Aussie higher.
• The markets remained in risk-on mood, with upbeat US data boosting equities.
• AUD/USD could correct lower, but buyers ready to add at lower levels.

The AUD/USD pair has continued to rally, reaching 0.6982 although ending the day roughly 50 pips below this last. Australian data released at the beginning of the day met the market’s expectations, with Q1 GDP printing at -0.3% QoQ as expected. The Commonwealth Bank Services PMI for May hit 26.9, beating the market’s expectations, while Building Permits decreased by 1.8% in April, better than the 15% slump expected. Also, China released the Caixin Services PMI for the same month, which jumped to 55 from 44.4.

The pair fell intraday to 0.6856, as better than anticipated US data pushed investors to take some profits out of the table, although the following bounce indicates that buyers are willing to add at lower levels.  Australia will release April Retail Sales this Thursday, seen at -17.9%, and the Trade Balance for the same month, with the trade surplus forecasted at 7500M.

AUD/USD Short-Term Technical Outlook

The AUD/USD pair may correct further lower, but as said, bulls retain control and would probably continue to add on slides. In the 4-hour chart, technical indicators have stabilized after correcting extreme overbought readings, well above their midlines. Meanwhile, the 20 SMA maintains its sharp bullish slope below the current level yet above the larger ones, which also gain upward traction. Large stops are likely accumulated above the 0.7000 level, and if those are triggered, the pair could quickly extend its advance up to 0.7050.

Support levels: 0.6900 0.6865 0.6830  

Resistance levels: 0.6980 0.7010 0.7050