AUD/USD Could Take Hit, US GDP Contracts 1.6%
- AUD/USD could extend losses below 0.6850 and 0.6800.
- A major bearish trend line is forming with resistance near 0.6950 on the 4-hours chart.
- EUR/USD and GBP/USD are moving lower below key supports.
- The US Gross Domestic Product contracted 1.6% in Q1 2022.
AUD/USD Technical Analysis
The Aussie dollar started a major decline from well above 0.7200 level against the US Dollar. AUD/USD traded below the 0.7050 support level to enter a bearish zone.
Looking at the 4-hours chart, the pair settled below the 0.7000 level, the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).
The pair even broke the 0.6920 support and traded as low as 0.6850. Recently, there was a minor upside correction above the 0.6920 level. However, upsides were limited above the 0.6950 pivot level.
The pair is now trading well below 0.6920. There is also a major bearish trend line forming with resistance near 0.6950 on the same chart. The next major resistance sits near 0.7000 zone and the 200 simple moving average (green, 4-hours).
On the downside, the 0.6850 level is a decent support. A downside break below the 0.6850 support could send the pair further lower. The next major support sits near the 0.6800 zone.
Fundamentally, the US Gross Domestic Product report for Q1 2022 was yesterday released by the US Bureau of Economic Analysis. The market was looking for a 1.5% decline in the GDP.
However, the actual result was disappointing, as the US GDP decreased at an annual rate of 1.6 percent in the first quarter of 2022.
Looking at EUR/USD, the pair is moving lower from the 1.0600 resistance. Similarly, GBP/USD is showing bearish signs below the 1.2300 level.
- UK GDP for Q1 2022 (QoQ) - Forecast +0.8%, versus +0.8% previous.
- US Initial Jobless Claims - Forecast 228K, versus 229K previous.