AUD/USD Forecast: Bearish Case Limited Despite An Intraday Slide

• The RBA will keep rates on hold, yield curve control until employment and inflation progress towards their goals.
• Upbeat US data and a knee-jerk in Wall Street-backed the greenback.
• AUD/USD holding on to a positive stance, bears to take over once below 0.6840.

The AUD/USD pair ends Tuesday with modest losses just below the 0.6900 level, retreating from a daily high of 0.6976. The pair spent most of the day in higher ground, falling within the US session on the back of upbeat American data and falling equities. Wall Street recovered ahead of the close, helping the pair to recover some of the ground lost.

The RBA released the Minutes of its latest meeting, which showed that policymakers aim to maintain the target for three-year yields until progress towards the bank’s goals is seen in employment and inflation. The same applies to the cash rate at record lows. This Wednesday, Australia will publish April New Home Sales and the Westpac Leading Index for May, previously at -1.5%.

AUD/USD Short-Term Technical Outlook

The AUD/USD pair is holding on to its positive bias despite its latest retracement. In the 4-hour chart, the pair remains above all of its moving averages, with the 20 SMA providing intraday support at 0.6875. Technical indicators have retreated from intraday highs but pared their declines around their mid-lines. The risk will turn south on a break below 0.6840, a relevant static support level.

• Support levels: 0.6875 0.6840 0.6795
• Resistance levels: 0.6935 0.6980 0.7020