Yahoo Finance AUD/USD Forecast – Aussie Looks Vulnerable
AUD/USD Forecast Video for 07-02-2024
Australian Dollar vs US Dollar Technical Analysis
The Aussie dollar initially tried to rally a bit during the trading session on Tuesday, but seems to be struggling right around the 0.65 level. The 0.65 level is an area that has been important more than once, and the fact that we pulled back from there does suggest that perhaps the Australian dollar may have further to fall. In that environment, I expect to see USD strength across the board.
This does make a certain amount of sense considering that the greenback has been strengthening against most currencies in a risk off move. Ultimately, if we break down below the lows of the Monday session, I think that we continue to go down to the 0.6350 level. That’s an area that’s seen a lot of action in the past, so it does make a certain amount of sense that market memory comes into play.
If we can turn around and break above the 0.6550 level, then I think the Australian dollar has a shot at going to the 0.6650 region. Keep in mind that the Australian dollar is highly levered to the Asian economy and it is worth noting that the Chinese economic numbers have been poor as of late, so that certainly won’t help the Australian dollar. The fact that the Federal Reserve may push back interest rate cuts certainly doesn’t help the Aussie against the greenback and of course, there are plenty of reasons to think they’re geopolitical concerns out there that could drive money back into the US treasury market, which by extension means that they are driving money into the US dollar.
So all of this connected does suggest that perhaps the Aussie is going to struggle. And even if we did rally from here, I would not look for a move above the 0.6650 level and in fact, would love to short the pair from that region again on signs of exhaustion if I get that opportunity. At this point, I think the USD is about to make a resurgence, at least for a while. This makes a certain amount of sense in this environment if you think about it.
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This article was originally posted on FX Empire
