AUD/USD Forex Signal: Extremely Bearish Below 0.7115

Crispus Nyaga

The pair will likely continue the bearish trend as the market attempts to test the S1 at 0.7065.

Bearish View

  • Sell the AUD/USD and add a take-profit at 0.7065.

  • Add a stop-loss at 0.7250.

  • Timeline: 1-2 days.

Bullish View

  • Set a buy-stop at 0.7200 and a take-profit at 0.7300.

  • Add a stop-loss at 0.7100.

The AUD/USD pair was little changed in the Asian session as the market reflected on the latest Australian and China data. The pair is trading at 0.7150, which is slightly above this month’s low of 0.7115.

Australia and China Economic Data

The AUD/USD pair was little changed on Tuesday after the latest numbers from China and Australia. In China, data by the National Bureau of Statistics showed that the country’s manufacturing PMI rose from 49.2 in October to 50.1 in November. This was the first time in a few months that the figure has risen. It also means that the sector is doing relatively well even as challenges remain.

Additional data showed that the non-manufacturing PMI declined slightly from 52.4 to 52.3. Subsequently, the composite PMI rose from 50.8 to 52.2, signalling that the country’s economy was doing relatively well. Chinese numbers are usually important for the Australian economy because of the volume of goods that China buys from Australia.

The AUD/USD also reacted to data from Australia. The numbers revealed that the country’s private sector credit rose by 0.5% while building approvals declined sharply in October. This signals that home prices will likely remain high as inventories lag.

Economic numbers from the US and the overall decline of volatility also played a role in the country’s price action. In a statement, Joe Biden urged Americans to carry on as normal even as the Omicron variant spreads. He insisted that all Americans should get the vaccine.

Later today, the pair will react to the latest US consumer confidence data by Conference Board. The numbers are expected to show that US consumer confidence declined to 110.9 in November as inflation concerns remain.

AUD/USD Forecast

The AUD/USD pair is trading at 0.7154. On the four-hour chart, this price is slightly below the important support at 0.7170, which was the lowest level on September 30th. It is attempting to do a break and retest pattern.

The price is also at the middle of the Bollinger Bands and the standard pivot point. It has also moved slightly below the 25-day and 50-day moving averages.

Therefore, the pair will likely continue the bearish trend as the market attempts to test the S1 at 0.7065. This view will be invalidated if the price rises above the key resistance at 0.7200.

AUD/USD

Crispus Nyaga
Crispus Nyaga is a financial analyst, coach, and trader with more than 8 years in the industry. He has worked for leading companies like ATFX, easyMarkets, and OctaFx. Further, he has published widely in platforms like SeekingAlpha, Investing Cube, Capital.com, and Invezz. In his free time, he likes watching golf and spending time with his wife and child.

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