After an unsuccessful attempt by the "bears" to break through the support level of 0.6670, the AUD/USD pair rushed to renew the December high around 0.6900. The Australian dollar is supported by the weakening of the US currency, caused by the growing risks of a recession in the national economy in 2023 against the backdrop of steps taken by the US Federal Reserve to tighten monetary policy to combat record inflation.
Last week, the Federal Reserve Bank (FRB) of St. Louis released data from the so-called Sahm Rule, which real-time evaluates the business cycle. The indicator is based on monthly unemployment data from the Bureau of Labor Statistics, and in all cases where the three-month moving average of the indicator exceeded its 12-month low of 0.50 points, the US economy was either already in recession or entering one soon. In November this year, the value was at 0.07 points, which indicates the beginning of a global recession.
Another factor that supports the growth of the Australian dollar is the rise in prices for commodities and precious metals. Thus, over the past two weeks, WTI Crude Oil added 10.5%, while gold positions are strengthening at a slightly slower pace: gold has risen in price by 2.5% over the month, but the overall positive trend continues.
If the impact of the above factors continues, the AUD/USD pair may renew the December high within two to three weeks.
The long-term trend is with the target at 0.6900. After its breakout, the growth will continue to 0.7000. However, if the support level of 0.6670 is broken, we can expect a recovery of the downtrend with the targets at 0.6585 and 0.6500.
The medium-term trend is upwards: last week, traders unsuccessfully tried to break through the key support of the trend around 0.6693–0.6673, as a result of which the price rose and is currently trying to renew the high of the last week around 0.6766, after consolidation above which the positive dynamics will develop towards the target zone 4 (0.6929–0.6909).
Resistance levels: 0.6900, 0.7000. | Support levels: 0.6670, 0.6585, 0.6500.