AUD/USD Forecast – Australian Dollar Continues to Rally
Australian Dollar vs US Dollar Technical Analysis
The Australian dollar has rallied significantly during the early hours on Thursday, as we have seen the consumer price index numbers come out in the United States. They came out much lighter than anticipated, so traders are starting to focus on the idea that perhaps the Federal Reserve might have to cut rates later this year. Short term pullbacks should continue to be buying opportunities, and we have broken out of a rather significant symmetrical triangle. And therefore, I think you’ve got a situation where any time we pull back, that previous downtrend line should be support, as the 0.67 level also should offer extra support.
To the upside to 0.6850 Level was the swing high that offered significant resistance in the past, so I would pay attention to that level. But at this point, it’s a bit early to say that we won’t be able to go through there. I think at this point in time, as traders try to price in the idea of the Federal Reserve cutting rates down the road, it will continue to put pressure on the US dollar.
The Australian dollar, of course, is helped by the idea of commodity markets rallying, which of course is the whole idea of central banks around the world flooding the markets with cash, trying to get investment spurred, if that is in fact going to be the case, that should help the Aussie quite significantly. You also have to pay attention to the Asian economy and how it’s going, but right now, it certainly looks like this is all about the US dollar and Federal Reserve expectations.
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This article was originally posted on FX Empire