AUD/USD Forecast: Sentiment drives the pair lower ahead of employment data

AUD/USD Current Price: 0.6962

• Australia will release April employment figures early on Thursday.
• Wage growth in the first quarter of the year remained below the RBA’s desired level.
• AUD/USD turned bearish in the near term, could retest the year’s low at 0.6828.

The AUD/USD pair met sellers in the 0.7040 price zone for a second consecutive day, and bulls gave up, resulting in the pair falling to 0.6959. It trades a handful of pips above the latter as Asian traders reach their desks, and is at risk of falling further. The American dollar surged particularly during US trading hours, as the market’s sentiment took a turn for the worst. The usual suspects were the culprits, as investors were concerned about slowing economic growth and persistent inflationary pressures.

Data wise, Australia published the April Westpac Leading Index, which resulted at -0.15%, down from 0.33% in the previous month. The country also reported the Q1 Wage Price Index, up a modest 0.7% in the quarter, and raising by  2.4% on an annual basis. Australia is set to report its April employment figures on Thursday. The country is expected to have added 30K positions in the month, while the unemployment rate is foreseen down to 3.9% from the current 4%

AUD/USD short-term technical outlook

The AUD/USD pair is bearish, according to the daily chart, pulling back sharply from the 50% of its latest daily slide measured between 0.7265 and 0.6828 at 0.7045. In the mentioned time frame, technical indicators have resumed their declines within negative levels, while the 20 SMA keeps heading firmly lower far above the current level. The immediate resistance is the 38.2% retracement of the mentioned decline at around 0.7000.

The 4-hour chart shows that the pair is crossing below its 20 SMA, after meeting sellers around a bearish 100 SMA. Technical indicators have turned sharply lower and are currently within neutral readings, although hinting at substantial selling interest.

Support levels: 0.9650 0.6915 0.6870

Resistance levels: 0.7000 0.7045 0.7080  

View Live Chart for the AUD/USD