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AUDUSD Quotes Rushed to the Level of 0.70

1/9/2023 1:14 PM

As a result of the depreciation of the US dollar, the AUD/USD pair continued its upward movement, breaking through the level of 0.6900 against the backdrop of pessimistic investor sentiment, which expects a recession in the US economy this year. The US Federal Reserve, with its rhetoric regarding the tightening of monetary policy, only reinforces this thesis, causing sales of the US dollar.

Employment and supply figures for the US non-manufacturing sector also contribute to the weakening of the US currency and the growth of risky assets. The Institute for Supply Management (ISM) Services Employment Index for December was 49.8 points, which was worse than analysts' expectations at 51.5 points, and the ISM Services PMI was 49.6 points, below the projected 55. 0 points and the previous value of 56.5 points. In turn, the ISM Services New Orders Index for the same period fell from 56.0 points to 45.2 points, while the market expected the index to rise to 58.5 points. At the same time, traders ignore the positive statistics on the national labor market. Thus, in December, an increase in the Nonfarm Payrolls by 223.0 thousand was recorded after an increase by 256.0 thousand in the previous month, while the Unemployment Rate adjusted from 3.6% to 3.5%. In turn, the decrease in the number of Building Permits issued in monthly terms in November in Australia by 9.0% does not have a significant impact on the AUD/USD pair.

Market participants are focusing on more global events, such as a possible recession in the economy and a slowdown in the rate hike by the US Federal Reserve. Against this background, the AUD/USD pair may continue to strengthen to the level of 0.7000.

The long-term trend is upward. Today, market participants broke through the resistance level of 0.6900, and the next buying target is 0.7000; if it is broken out, the growth will continue to the level of 0.7130 (August 2022 high).

As part of the medium-term uptrend, the target zone 4 (0.6929–0.6909) was reached today. Probably, market participants will make an attempt to break it out, and if they succeed, then the target zone 5 (0.7129–0.7109) will become the next purchase target. The key trend support is shifting to the levels of 0.6739–0.6719. If the price corrects into this area, there will be an opportunity to consider new purchases with a target at today's high.

Resistance levels: 0.7000, 0.7130, 0.7275. | Support levels: 0.6670, 0.6585.

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