The Australian dollar, being heavily influenced by the commodity markets and global growth, is in a phase of assessing the direction of risk appetite.
- The AUD/USD experienced a slight decline during Tuesday’s trading session, highlighting a steady trend of support at the 0.66 level.
- This support has proven substantial since February, mirrored by an upper resistance at the 0.68 level.
- The currency’s fluctuations between these two levels have characterized the market over the past few months, and the current scenario suggests a continuation of this pattern.
In case of a breakout from this range, the market’s movements could yield a 200-point range based on a measured move. If the currency drops below the current support level, a further descent to the 0.64 level is predicted. Conversely, should there be a surge beyond the 0.68 level, the Australian dollar might be propelled toward the 0.70 level.
The Australian dollar, being heavily influenced by the commodity markets and global growth, is in a phase of assessing the direction of risk appetite. The market, consequently, is anticipated to remain noisy and turbulent. Economic trends suggest a potential leaning toward a depreciation in the currency’s value. However, until a breakout from the established range is observed, it is challenging to feel confident about engaging in any specific trading strategy, as on one hand, traders focus on a lack of growth, and at the same time, focus on central banks.
In such a scenario, it becomes paramount for the market to dictate the timing of buying and selling. As it stands, the current area could induce a slight bounce, thereby providing a temporary buying opportunity. A careful examination of the chart shows that although the currency is dangerously close to the lower end of the range, it has not yet breached the support level.
Given the prevailing conditions, it is highly probable that the market will continue to be noisy. Traders must, therefore, ensure risk management remains at the forefront of their strategies. The market’s inherent volatility demands a strong focus on maintaining a balance between potential gains and losses.
At the end of the day, the Australian dollar’s trajectory remains somewhat ambiguous, trapped between the 0.66 and 0.68 levels. Despite indications of a potential move toward the lower end of this range, the breakout point remains elusive. In these uncertain times, you must prioritize risk management and be responsive to market conditions as they are seemingly always in flux these days.
Ready to trade our daily Forex analysis? Check out the best forex trading platform for beginners Australia worth using.