AUD/USD Forecast – Australian Dollar Recovers After Initial Pullback
Australian Dollar vs US Dollar Technical Analysis
You can see that the Australian dollar did pull back just a bit during the trading session early hours on Tuesday but then turned around to show signs of life. This is only going to continue what I’ve been saying for some time that this pair just doesn’t have anywhere to be. In other words, think we continue to see a lot of the same nonsensical consolidation that we have seen for some time.
That’s going to be indicative of what I see in the forex world with a lot of major pairs because central banks around the world look like they will probably have to loosen sometime this year and if that’s going to be the case, then all currencies are back to the old game of racing to the bottom. In that scenario nobody really wins and we end up with this type of behavior.
Above we have the 50 day EMA that a lot of people will be paying attention to right along with the 200 day EMA but I think given enough time we could even go as high as 0.66. On the downside, we have the 0.65 level followed by the 0.6450 level. If we were to break down below that level that could open up the trapdoor for much deeper and rapid selling in the Australian dollar, perhaps allowing the US dollar to strengthen to the 0.63 level.
On the other hand, if the Australian dollar starts to strengthen and we take out the 0.66 level, it’s possible we could go as high as 0.69, although I think you would have to see a general malaise with the greenback to make that happen. After all, the Australian dollar doesn’t have any reason to go higher. The interest rate differential isn’t there, global economy growth isn’t really helping commodity markets the way that you would think. And of course, China is a major influence on Australia as well. So I think we just stay in the same pattern we’ve been in for some time.
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This article was originally posted on FX Empire