AUD/USD Forecast: Comfortable Above 0.7700, But Additional Gains Are Still Unclear

AUD/USD Current Price: 0.7728

• Australian NAB’s Business Confidence improved to 10 in January from 5.
• The poor performance of equities put a limit to AUD/USD appreciation.
• AUD/USD is comfortable above 0.7700, but additional gains are still unclear.

The AUD/USD pair advanced for a third consecutive day, reaching 0.7735 and retaining most of its intraday gains ahead of the close. The pair surged at the beginning of the day, unable to extend its advance, as the poor performance of equities offset the broad greenback’s weakness.

Data wise, Australian data was mixed. January NAB’s Business Confidence improved to 10 from 5, beating expectations. NAB’s Business Conditions in the same period, however, contracted to 14 to 7. Early on Wednesday, the country will release February Westpac Consumer Confidence, foreseen at -3% from -4.5% in the previous month.

AUD/USD Short-Term Technical Outlook

The AUD/USD pair could extend its advance, although bulls are showing limited conviction at the time being. In the 4-hour chart, the pair keeps developing above all of its moving averages, with the 20 SAM accelerating north, but still below the larger ones. Technical indicators are retreating from extreme overbought levels but without bearish strength. The bullish case will be firmer on an extension beyond 0.7770 a strong static resistance level.

Support levels: 0.7710 0.7675 0.7640  

Resistance levels: 0.7770 0.7810 0.7845

View Live Chart for the AUD/USD