[ad_1]
At the end of the day, the Australian dollar faces an uphill battle as negative pressure persists.
- The AUD/USD began the Wednesday session with a rally, but soon experienced a downturn, falling below the crucial 0.65 level.
- This decline indicates the presence of negative pressure in the market, with expectations of reaching the target of 0.64.
- The current attitude is one of caution, and that isn’t conducive for bullish behavior for the Aussie. Furthermore, the US dollar is considered to be a “safe haven” and this will come into factor as well.
Amidst the prevailing uncertainties, the Australian dollar is likely to encounter substantial noise. Economic concerns worldwide may play a crucial role in determining the fate of the Aussie. Particularly noteworthy is the weaker-than-anticipated Chinese PMI numbers, as China remains a major export destination for Australia. Additionally, the Australian economy heavily relies on commodities, making it vulnerable to weaknesses in the commodity markets. Thus, any further signs of weakness in this sector would inevitably impact the value of the Australian dollar.
While occasional rallies may occur, they are met with suspicion in the current climate. The 0.6550 level has recently acted as a resistance point, hindering upward momentum. Furthermore, the 0.66 level serves as the bottom of a consolidation rectangle that has presented a prolonged battle in the past, and the market will likely remember this level vividly. The 50-Day EMA is swiftly approaching the 0.66 level, strengthening the resistance, and increasing the likelihood of additional downward pressure. As a result, these rallies provide opportunities to acquire “cheap US dollars.”
Until risk appetite improves globally, it is challenging to envision a scenario where the Australian dollar can sustainably thrive. The prevailing market sentiment suggests a continued preference for the downside. Consequently, it is prudent to approach trading with a bearish outlook. The market continues to see a lot of volatility, but ultimately it is a situation that favors negativity.
At the end of the day, the Australian dollar faces an uphill battle as negative pressure persists. Economic concerns and weaker Chinese PMI numbers raise apprehensions about the sustainability of the currency’s performance. The heavy reliance on commodities further exposes the Australian dollar to market vulnerabilities. Rallies are met with suspicion, and resistance levels act as significant barriers. Traders are advised to approach the market with caution and align their strategies with the prevailing downward trend until risk appetite and economic conditions improve on a global scale.
Ready to trade our daily Forex forecast? Here’s a list of some of the best Australian forex brokers to check out.
[ad_2]