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AUD/USD Forecast: Losing Its Bullish Momentum But No Signs Of An Upcoming Slide

Valeria Bednarik - Chief Analyst at FXStreet
  • Australia’s Westpac Leading Index fell by 1.5% In May and after declining 0.73% in April.
  • RBA’s Governor Lowe speech and PMIs taking center stage this Thursday.
  • AUD/USD losing its bullish momentum but no signs of an upcoming slide.

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The AUD/USD pair surged to a fresh two-month high of 0.6615, holding around the 0.6600 figure at the end of the US session. The Aussie advanced in spite of some negative news coming from the region. Australia’s Westpac Leading Index fell by 1.5% In May, while tensions mount with its largest trading partner, China. Beijing has imposed punitive tariffs on certain Australian goods, and will likely continue trimming imports from the country, amid Australian decision to support the US investigation on the origins of COVID-19. Stocks posting solid gains underpinned the pair.

This Thursday, Australia will see the release of the Commonwealth Bank PMIs for May. Manufacturing output is foreseen at 46.5 from 44.1. The services index previously printed at 19.5. Also, RBA’s Governor Lowe is due to participate in a panel discussion at the Financial Services Institute of Australasia, in Sydney.

AUD/USD short-term technical outlook
The AUD/USD pair seems poised to extend its advance, as it continues to post higher highs on a daily basis. In the 4-hour chart, the pair is well above all of its moving averages, with the 20 SMA accelerating north above the larger ones. Technical indicators, in the meantime, have lost their bullish strength, but hold on to overbought levels, far from signaling an upcoming bearish move. Further gains are to be expected on a break above the mentioned daily high.

Support levels: 0.6570 0.6530 0.6490

Resistance levels: 0.6615 0.6650 0.6685

View Live Chart for the AUD/USD

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