AUD/USD Forecast: On its way to test June’s low

AUD/USD Current Price: 0.6896

• Australian flash S&P Global  PMIs surprised to the upside in June.
• Risk-off flows amid recession fears weighed on AUD/USD.
• AUD/USD edged lower for a second consecutive day, but the slide is not yet over.

The AUD/USD pair fell to a  fresh weekly low of 0.6868, ending the day nearby as a dismal market mood hit the Australian currency while boosting demand for the greenback. Recession fears dominated financial after US Federal Reserve Chair Jerome Powell testified on monetary policy before Congress. Powell warned once again about the risks of the fast pace of quantitative tightening but also expressed his determination to control record inflation.

On the data front, Australian figures brought a positive surprise. The flash June S&P Manufacturing PMI surged from 55.7 in May to 55.8, while the services index beat expectations by printing 52.6. The US figures, on the other hand, missed the market’s expectations, but the PMIs remained in expansion territory. Australia will not publish relevant macroeconomic data on Friday.

AUD/USD short-term technical outlook

The AUD/USD pair has room to extend its slump, according to the daily chart, eyeing June’s monthly low at 0.6850. In the mentioned time frame, technical indicators remain within negative levels, while the RSI has already turned lower, reflecting increased selling interest. At the same time, the 20 SMA accelerated south far above the current level and below the longer ones.

In the near term, and according to the 4-hour chart, the risk is skewed to the downside. A bearish 20 SMA provides intraday dynamic resistance, currently at 0.6925, while technical indicators continue to seesaw within negative levels.

Support levels: 0.6850 0.6810 0.6770

Resistance levels: 0.6950 0.6960 0.7030

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