AUD/USD Forecast: 2021 low under attack

AUD/USD Current Price: 0.7333

  • Encouraging Chinese data provided support to AUD/USD at the beginning of the day.
  • Australia will publish the July NAB’s Business Confidence, foreseen at 15.
  • AUD/USD is poised to extend its decline near-term to fresh yearly lows.

The AUD/USD pair edged modestly lower at the beginning of the week, ending near 0.7329, its daily low. The aussie advanced modestly at the beginning of the day, underpinned by upbeat Chinese data and a positive market’s mood. The Consumer Price Index in the country rose 1% YoY in July, beating the market’s expectations, while the Producer Price Index for the same period was up 9%. The figures underpinned Asian indexes, most of which closed in the green.

The optimistic sentiment faded as the day went by, with AUD/USD weighed by the poor performance of Wall Street. Also, gold prices remained under selling pressure, with the bright metal ending the day at around $1,728 a troy ounce. During the upcoming Asian session, Australia will publish July HIA New Home Sales and July NAB’s Business Confidence, seen at 15 from 11 in the previous month.

AUD/USD short-term technical outlook

From a technical point of view, the AUD/USD pair is at risk of extending its decline. The 4-hour chart shows it remains below all of its moving averages, with the 20 SMA accelerating south and ready to cross below the 100 SMA. Technical indicators lack directional strength but remain within negative levels, without signs of downward exhaustion. The main support level now is 0.7288, this year low, and the level to break to confirm a bearish continuation during the upcoming sessions.

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Support levels: 0.7290 0.7250 0.7210

Resistance levels: 0.7335 0.7380 0.7420  

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