AUD/USD Forecast: Tepid buying leaves the door open for a lower low

AUD/USD Current Price: 0.6748

• Australian employment figures were upbeat, but so were inflation perspectives.
• Fluctuations in the market sentiment lead the way for AUD/USD.
• AUD/USD is neutral-to-bearish in the near term, could fall further once below 0.6710.

The AUD/USD pair ended Thursday with modest losses around the 0.6750 level, hit by a dismal market mood and despite better-than-anticipated Australian employment data. The country reported it added 88.4K new jobs in June, much better than the 25K expected. Full-time new positions accounted for 52.9K, while part-time ones stood at 35.5K. Additionally, the Unemployment rate contracted to 3.5% from 3.9%, much better than the 3.8% expected, while the Participation Rate increased to 66.8%. On a down note, Consumer Inflation Expectations in July surged to 6.3%.

The pair fell to 0.6680 early in the American session as risk-off flows dominated financial markets throughout the first half of the day, with the focus on potential recessions across the globe. It’s clear that central banks’ actions are having no evident effect on inflation, which continues to soar. Stocks plummeted, weighing on AUD/USD, although cooling expectations for an even tighter US monetary policy helped both bounce back.

AUD/USD short-term technical outlook

The daily chart for the AUD/USD pair shows that the risk remains skewed to the downside as the pair develops far below bearish moving averages. Furthermore, technical indicators remain in the negative territory, with the Momentum heading lower and the RSI consolidating at around 37.

In the near term, and according to the 4-hour chart, the pair is neutral-to-bearish. AUD/USD is currently struggling to overcome a mildly bearish 20 SMA while the Momentum indicator consolidates around its 100 level. The longer moving averages maintain their bearish slopes far above the current level, while the RSI advances but within negative levels.

Support levels 0.6710 0.6670 0.6625

Resistance levels: 0.6810 0.6850 0.6890

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