AUDUSD Tests Key Trendline
29 June 2022
The Australian dollar fell on Wednesday and traded 0.25% weaker ahead of the US session as sentiment in the markets deteriorated yesterday.
US data in focus
Investors will now pay attention to the US GDP data, which is expected to stay at -1.5% in the first quarter, while to GDP price index should remain at 8.1%, implying massive stagflation in the US.
Later today, FOMC Chairman Jerome Powell, ECB President Christine Lagarde, and BOE Governor Bailey will speak at the ECB's annual Forum on Central Banking.
According to statistics released on Tuesday in the US, the Conference Board's Consumer Confidence Index fell to 98.7 from 103.2 in May, indicating that consumer morale continued to deteriorate in June. The poll also revealed that from May's corrected print of 7.5%, the one-year consumer inflation rate estimates increased to 8%.
Key bullish support
The Aussie dropped to the bullish trend line from previous lows, currently near 0.6870. However, if that level is broken down, the bearish trend could be confirmed, most likely leading to a decline toward the current cycle lows near 0.6840.
However, the global situation favors risk-off currencies, in this case, the USD, likely pushing the AUDUSD pair further lower over the following weeks.
On the upside, the short-term resistance could be at the downward trend line near 0.6925, and if not held, the Aussie could stage a relief rally toward 0.70 again.