AUDUSD Forex Forecast – Moving Average Resistance Holding

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AUDUSD has been trending lower on its 1-hour time frame, as the short-term 100 SMA crossed below the 200 SMA. In addition, these moving averages are holding as dynamic resistance for the pair.

Zooming out to longer-term time frames shows that AUDUSD is currently testing a key support area around .7600 which has not been broken since 2009. A break below this area could set off more losses for the pair, possibly until .7200 or all the way down to the next long-term support at .6000.

Stochastic on the 1-hour chart is pointing down, which means that sellers are getting stronger. Apart from that, RSI is also reflecting a pickup in bearish momentum, which might be strong enough to trigger a downside break of the .7600 floor.

AUDUSD Forex Fundamentals

Earlier today, Australia reported a 6.9% decline in its Westpac consumer confidence figure, enough to erase the 6.4% increase seen in the previous month. Tomorrow, Australia is set to release its employment figures and possibly show a 12.1K rebound in hiring, which might keep the jobless rate steady at 6.2% for May.

After that, the US will release its retail sales report and probably show a 1.1% gain in its headline figure and a 0.7% uptick in its core figure. Most traders are expecting to see an upside surprise for May since the jobs report came in much stronger than expected and was followed by better than expected wage growth data.

However, weaker than expected reports from the US or strong data from Australia might still lead to a bounce off support, possibly back until the nearby resistance at .7800. Stronger bullish momentum might lead to the formation of a double bottom pattern and a potential break from the neckline, which could push AUDUSD up by an additional 200 pips or the same height as the reversal formation.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.