AUD/USD Price Analysis – May 16, 2023
Daily Price Outlook
Looking ahead, the AUD/USD currency pair is expected to face downward pressure as the market sentiment leans towards risk-off. This cautious outlook follows the release of US Retail Sales data for April.
It is noteworthy that the market anticipates a positive reading of 0.7% month-on-month, in contrast to the previous negative reading of -0.6%. Therefore, the outcome of these figures is likely to have an impact on the performance of the AUD/USD pair.
Additionally, investors will closely monitor the talks between US President Biden and House Speaker McCarthy, aimed at avoiding a potential debt default. Any developments that alleviate concerns regarding the US debt ceiling could potentially ease downward pressure on the AUD/USD pair.
Furthermore, attention will be focused on Australia's economic indicators. The release of the Wage Price Index for Q1 and employment figures for April, scheduled for Wednesday, will provide additional trading opportunities for AUD/USD pair traders.
These data points will offer insights into the health of the Australian economy and could influence the performance of the currency pair.
AUD/USD Price Chart - Source: Tradingview
AUD/USD – Technical Outlook
The AUD/USD pair has successfully surpassed the 0.6665 level and established a position above it, indicating a potential formation of an intraday bullish wave. However, it is important to note that the EMA50 has acted as a significant resistance level at 0.6705. Additionally, the stochastic indicator is currently showing clear negative signals.
Considering these factors, we maintain the view that there is a valid possibility for the bearish wave to resume in the upcoming period. To provide further confirmation of the continuation of the bearish bias, it is necessary for the price to break below 0.6665.
This would pave the way for the pair to target the 0.6550 area as the next major objective. It is worth mentioning that a breach of the resistance at 0.6705 would invalidate the suggested decline and open the potential for additional gains, potentially reaching 0.6780.
For today's trading range, we anticipate support at 0.6610 and resistance at 0.6725. Therefore, our forecast for today is bearish.
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