AUD/USD Forecast – Aussie Tumbles after Wage Growth Misses Forecasts

The Australian Dollar was lower on Wednesday after a report showed Australian wages grew at the fastest annual pace in a decade last quarter. Still, the figure came short of market forecasts, which could lessen the pressure on the Reserve Bank of Australia (RBA) for further aggressive interest rate hikes.

At 02:56 GMT, the AUDUSD is trading .6836, down 0.0020 or -0.28%. On Tuesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $67.90, down $0.24 or -0.35%. Figures from the Australian Bureau of Statistics (ABS) out on Wednesday showed its wage price index rose 0.8% in the December quarter from the previous quarter, under forecasts of a 1.0% increase.

The main trend is down according to the daily swing chart. A trade through .6812 will signal a resumption of the downtrend. A move through .7029 will change the main trend to up. The minor trend is also down. A trade through .6921 will change the minor trend to up. This will also shift momentum to the upside.

Potential resistance levels are clustered at .6867, .6894, and .6921. On the downside, the key support area is .6760 and .6715. The trader’s reaction to the minor pivot at .6867 is likely to determine the direction of the AUDUSD on Wednesday.

A sustained move under .6866 will indicate the presence of sellers. If this move generates enough downside momentum, look for the selling to extend into the minor bottom at .6812. A trade through .6812 will indicate the selling pressure is getting stronger, with .6760 – .6715 as the next target zone.

A sustained move over .6867 will signal the return of buyers. This could lead to a difficult rally with the first target at .6894, followed by a resistance cluster at .6921. The latter is a potential trigger point for an acceleration to the upside, with .6985 as the next target.

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