In summary, the Australian dollar is currently facing resistance as Wednesday’s trading session demonstrated a minor pullback followed by a bounce from the 50-Day EMA.
- During Wednesday’s trading session, the AUD/USD experienced a minor pullback before rebounding from the 50-Day Exponential Moving Average.
- However, it is crucial to acknowledge that the 200-Day EMA could pose a significant resistance barrier and potentially serve as a target for the currency. It is worth noting that the 0.67 level has historically been an active area, and the Australian dollar currently appears slightly overbought.
- Given the prevailing global concerns, a pullback seems likely, considering the sensitivity of the Australian dollar to global growth as a commodity currency.
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Should a reversal occur, breaking below the 50-Day EMA, it is probable that the currency pair could decline toward the 0.66 level. The 0.66 level has previously acted as a strong support zone, and a breach below that level could potentially drive prices toward the 0.65 handle. Notably, the 0.65 level has exhibited support in the past, and the recent bounce suggests continued interest in this region. If a breakdown occurs below 0.65, there is a possibility of the price descending further to the 0.64 level based on the measured move of the previous price range.
Conversely, a breakthrough above the 0.68 level would significantly alter the outlook for the currency pair. However, it is likely that a pullback is necessary to accumulate sufficient momentum before attempting such a move. A sudden surge without consolidation would potentially lead to a substantial negative correction in the future. Considering the global economy’s deceleration, it is unlikely for the Australian dollar to experience a sudden surge. While the surprise interest rate hike by the Reserve Bank of Australia (RBA) may have caused temporary fluctuations, the limited growth prospects will likely weigh on the currency in the long run.
In summary, the Australian dollar is currently facing resistance as Wednesday’s trading session demonstrated a minor pullback followed by a bounce from the 50-Day EMA. The 200-Day EMA serves as a significant hurdle for the currency pair, while the 0.67 level has historical significance and currently reflects an overbought condition. In light of prevailing global concerns, a pullback appears imminent. Traders should closely monitor price movements for potential support and resistance levels. As the global economy slows, it is unlikely for the Australian dollar to experience a sudden surge. Keep an eye on developments and exercise caution when considering positions in this currency pair.
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