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AUD/USD Forecast: Turned Sharply Lower After Being Unable To Hold Above 0.6630

Valeria Bednarik - Chief Analyst at FXStreet

Current Price: 0.6486

  • Stocks rise after Monday’s crash but risk aversion still reigns.
  • AUD/USD turned sharply lower after being unable to hold above 0.6630

In another volatile day, US stocks and crude oil recover some lost ground, but AUD/USD dropped, breaking relevant technical levels. The improvement in risk sentiment failed to boost AUD/USD. The pair weakened as the US dollar recovered from Monday’s slide. US yields rose amid expectations of a fiscal stimulus. US President Trump and advisers meet with Republican senators on Tuesday to discuss a payroll tax holiday. More details are expected to be announced soon. On Wednesday data to be released in Australia includes Westpac Consumer Confidence and mortgage loans.

AUD/USD Short-Term Technical Outlook

Volatility continues to be the norm for AUD/USD. On Monday, it travelled 400 pips from low to the top and on Tuesday, 150 pips. Since Tuesday’s Asian session, it has been moving with a bearish bias, and it accelerated during the American session. The AUD/USD failed to hold above 0.6650 and turned to the downside. After breaking 0.6570, the outlook worsened. It bottomed at 0.6460 and then bounced toward 0.6500.

Technical indicators in the four hours chart are moving away from oversold levels, suggestion some consolidation ahead. The chart will favour further losses if it drops under 0.6460. The next support lies at 0.6430 and then comes 0.6400. A recovery above 0.6540 would ease the bearish pressure. On a wider perspective, the Aussie needs to break and hold above 0.6660 to open doors to more sustainable gains.

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