U.S. markets closed

AUD/USD Forecast: Short-Term Neutral, Bullish Potential Is Quite Limited

Valeria Bednarik - Chief Analyst at FXStreet

AUD/USD Current Price: 0.6084

  • The Reserve Bank of Australia is expected to keep its monetary policy on hold this month.
  • Advancing equities underpinned the Aussie which continues to lack self-strength.
  • AUD/USD short-term neutral, bullish potential is quite limited.

The AUD/USD pair flirted with the 0.6100 level at the beginning of the week, ending Monday around 0.6080. The Aussie advanced throughout the day following the lead of global equities, which surged on hopes there’s light at the end of the pandemic tunnel. The contagion curve has eased in Spain, Italy, and New York, and so did the death toll, although the improvement is far from encouraging. Anyway, it was enough to push investors into high-yielding assets.

In the data front, Australia released the TD Securities Inflation report for March, which rose by 0.2% MoM, better than the previous -0.1%,  and by 1.5% when compared to a year earlier from 1.6% previously. The country will release the February Trade Balance, and more relevantly, the RBA will have a Monetary Policy Meeting. The central bank is seen holding fire for now, although the accompanying statement will likely reflect policymakers’ concerns about the pandemic, and limit any bullish potential of the AUD.

AUD/USD Short-Term Technical Outlook

The AUD/USD pair offers a short-term neutral stance, as, in the 4-hour chart, the pair is barely above the 20 and 100 SMA, which lack directional strength. Technical indicators in the mentioned chart have entered positive levels, but lack clear directional strength, as the Momentum advances modestly while the RSI turned lower at around 54.

Support levels: 0.6075 0.6030 0.5990

Resistance levels: 0.6110 0.6150 0.6185

Image source from Pixabay

See more from Benzinga

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.