Yahoo Finance AUD/USD Forecast – Australian Dollar Continues to Struggle With Upside Slant
Australian Dollar vs US Dollar Technical Analysis
The Aussie dollar rallied early during the trading session again on Friday in a familiar pattern that we have seen all week. Early in the day, the Aussie rallies and then gives up gains to turn around and form shooting stars. As things stand right now, there’s nothing to believe that things are going to change, but the 200 day EMA above may be part of the problem as it is a technical indicator that a lot of people pay attention to. Furthermore, there’s a lot of consolidation in that area, which of course is going to mean a lot of noise and order flow. The 0.6625 level above is going to be your short-term ceiling. So, if we can break above that, I do think that there’s the possibility that we go higher by another 100 pips, maybe a little bit more.
On the other hand, if we continue to sell off in this area above, it’s likely that exhaustion will set in and the Australian dollar will pop back down to the 0.65 level, an area that has been very important more than once and is a bit of a magnet for price anyway. I have looked at this through the prism of consolidation and I do think that’s essentially what we’re trying to carve out here.
If we were to break down below the very bottom of the consolidation, which I find at the moment to be 0.6450, then it opens up the floodgates for more selling. That would more likely than not be a pro-US dollar move across the board, not just here, and it would probably have something to do with some type of risk off move. Keep in mind that the Australian dollar is highly levered to the Chinese economy, and of course, commodities as they are one of the world’s largest hard commodity producers. With that being said, the interest rate differential is still not a lot to write about in this pair, so I don’t think that comes into play unless of course, the Federal Reserve starts actively cutting, which obviously would help the Aussie.
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This article was originally posted on FX Empire
