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AUD/USD Forecast: Dropped To Its Lowest Level In Seven Weeks

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AUD/USD Forecast: Dropped To Its Lowest Level In Seven Weeks
  • AUD/USD dropped to its lowest level in seven weeks.
  • USD capitalized on strong data, recovering bond yields.
  • Additional losses are likely toward 0.7500 in the near-term.

After closing the previous two trading days in the negative territory, the AUD/USD pair made a technical correction but failed to hold above 0.7600. With the greenback starting to gather strength in the second half of the day, the pair lost its traction and touched its lowest level since early February at 0.7563.

The data published by the US Department of Labor showed on Thursday that the weekly Initial Jobless Claims dropped to 684,000 in the week ending March 20, the lowest reading since the beginning of the pandemic. Additionally, the US Bureau of Economic Analysis revised its fourth-quarter GDP growth to 4.3% from 4.1%.

Furthermore, the 10-year US Treasury bond yield, which closed the first three days of the week lower and lost around 6% during that time span, turned positive on the day during the American session and allowed the greenback to continue to outperform its rivals. Reflecting the broad-based USD strength, the US Dollar Index reached its highest level in four months at 92.91.

On Friday, the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred gauge of inflation, will be featured in the US economic docket.

AUD/USD Short-Term Technical Outlook

The Relative Strength Index (RSI) indicator on the four-hour chart stays near 30, suggesting that AUD/USD could recover modestly before the next leg down. On the upside, the initial resistance is located at 0.7640 (20-period SMA) ahead of 0.7720 (100-period SMA) and 0.7760 (200-period SMA).

On the other hand, 0.7560 (daily low/February 2 low) is the first line of defence before 0.7500 (psychological level) and 0.7460 (December 21, 2020, low).

 

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Posted-In: FXStreetNews Forex Global Markets

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