Forex News

• AUD/USD trades sideways between 20- and 50-day SMA levels.
• RSI falls below 50, signaling sellers are gaining momentum.
• Break below 0.7099 exposes 0.7024 and 0.7000 supports.

The AUD/USD edges lower during the North American session, poised to remain sideways within key technical support and resistance levels, with the 20-day Simple Moving Average (SMA) at 0.7187 and the 50-day SMA at 0.7095. At the time of writing, the pair is trading around 0.7137, down 0.17%.

AUD/USD Price Forecast: Technical outlook

From a technical perspective, the AUD/USD market structure suggests further downside if the pair falls below the April 29 swing low at 0.7101, reaching a 4-week low at 0.7079 on May 19.

The Relative Strength Index (RSI) turned bearish, signaling that sellers are gaining momentum, as it fell below its 50-neutral level.

For a bearish resumption, the AUD/USD must clear the May 21 low at 0.7099, so traders can test the 50-day SMA. On further weakness, the 100-day SMA at 0.7024 becomes the next support level, followed by 0.7000.

On the upside, a break above the 20-day SMA will expose the 0.7200 milestone. Above this area, the next resistance is the year-to-date (YTD) peak at 0.7264.

AUD/USD Price Chart – Daily

DBS Group Research economists Radhika Rao and Chua Han Teng highlight that ASEAN-6 economies are experiencing asymmetric inflation outcomes despite a common energy shock. Indonesia and Malaysia show relatively contained inflation, while Thailand, Vietnam and Philippines face higher readings. Rising WPI/PPI point to pipeline pressures, with policymakers expected to stay alert and some central banks, including Indonesia, Philippines and Vietnam, likely to raise rates further.

Divergent inflation and tightening prospects

"While ASEAN-6 economies face the same energy shock, their inflation outcomes have been asymmetrical. On the benign end of the spectrum, inflation in Indonesia and Malaysia remained contained at 2.4% yoy and 1.9% yoy, respectively, in April, while on the elevated side, Thailand, Vietnam, and Philippines’ inflation jumped to 2.9%, 5.5%, and 7.2%. Price stability, however, comes with trade-offs."

"Rising WPI/PPI prints signal pipeline pressures for the retail price gauge, as businesses will be unable to absorb the full extent of an increase in input costs as inventories run down. Although WPI/PPI is not the official policy target, policymakers are likely to remain attentive to mounting pipeline pressures that could eventually feed into retail inflation and shape inflation expectations."

"If geopolitical tensions persist, we view Philippines, Thailand, and Vietnam to be most exposed to price pressures, whilst inflation in Indonesia and Malaysia will also increase but at a moderate pace."

"In addition to inflation outcomes, currency and financial market stability will also guide the decision and timing of monetary policy. BI increased its benchmark rate by a more-than-expected 50bps to 5.25% on Wednesday, following BSP’s move in April and Singapore MAS’ shift to normalising its FX parameters. We expect further rate increases from Indonesia and Philippines, with Vietnam next in line to raise rates."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann expect USD/CNH to trade quietly between 6.7920 and 6.8060 intraday after recent moves failed to generate fresh momentum. On a 1–3 week horizon, the bank holds a neutral view, seeing current price action as part of a range between 6.7820 and 6.8220. Over 1–3 months, the rebound still has scope to break above 6.9720, facing strong resistance near 6.9960.

Dollar-Yuan stuck in range-trading phase

"24-HOUR VIEW: USD dropped to a low of 6.7981 two days ago. Yesterday, when USD was at 6.8010, we stated that “while there has been an increase in downward momentum, it is not sufficient to indicate a continued decline.” We also indicated that USD “is more likely to trade in a lower range of 6.7910/6.8110.” USD then traded within a narrower range than expected (6.7964/6.8080), closing marginally lower by 0.02% (6.8002). The price action provides no fresh clues. Today, USD could trade between 6.7920 and 6.8060."

"1-3 WEEKS VIEW: We revised our view to neutral yesterday (21 May, spot at 6.8010). We highlighted that “the current price movements are likely part of a range-trading phase between 6.7820 and 6.8220.” There is no change in our view. "

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)