Key Highlights
- AUD/USD followed a bullish path and traded to a new 2020 high above 0.7000.
- A crucial bullish trend line is forming with support near 0.6830 on the 4-hours chart.
- The Fed interest rate decision will be announced today (forecast – no change from 0.25%).
- The US Consumer Price Index could increase 0.2% in May 2020 (YoY).
AUD/USD Technical Analysis
In the past few weeks, the Aussie Dollar followed a nice uptrend from the 0.6500 support against the US Dollar. AUD/USD broke many hurdles near 0.6800 and traded to a new 2020 high above 0.7000.
Looking at the 4-hours chart, the pair traded as high as 0.7042 and it is now trading well above the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).
It is currently correcting gains from the 0.7042 high. It broke the 23.6% Fib retracement level of the upward move from the 0.6567 low to 0.7042 high. However, there are many key supports on the downside starting with 0.6860.
There is also a crucial bullish trend line forming with support near 0.6830 on the same chart. The trend line coincides with the 50% Fib retracement level of the upward move from the 0.6567 low to 0.7042 high.
If AUD/USD continues to move down, there are chances of it finding a strong buying interest near 0.6850 or 0.6830. Any further losses may perhaps start a steady bearish wave towards the 0.6700 level or the 100 simple moving average (red, 4-hours).
On the upside, the 0.7000 level is a major hurdle for the bulls. A successful daily close above 0.7000, followed by a break above the 0.7040 level could start another increase. The next key resistance is seen near the 0.7120 and 0.7150 levels.
Looking at EUR/USD, the pair is trading nicely above the 1.1250 support, and GBP/USD is likely to continue higher above the 1.2700 level.
Upcoming Economic Releases
- US Consumer Price Index May 2020 (MoM) – Forecast 0%, versus -0.8% previous.
- US Consumer Price Index May 2020 (YoY) – Forecast +0.2%, versus +0.3% previous.
- US Consumer Price Index Ex Food & Energy May 2020 (YoY) – Forecast +1.3%, versus +1.4% previous.
- Fed Interest Rate Decision – Forecast 0.25%, versus 0.25% previous.
