[ad_1]
As the Reserve Bank of Australia has sat on their hands a couple of meetings in a row, it looks like they have given up the idea of tightening monetary policy.
- The AUD/USD faced some challenges during the trading session on Friday, falling amid concerns that continue to weigh on traders.
- The market could reach the 0.6550 level, which has previously been supported in the past.
- If it breaks down below that level, it’s likely that the market will go looking for the 0.65 level, and then the bottom falls out. In this environment, the US dollar is likely to strengthen, and risk assets may get pummeled.
The bearish flag drawn on the chart opens up the possibility of a move down to the 0.62 level. This, coupled with the huge “H pattern,” suggests that the Aussie continues to suffer from fear out there, and of course, the idea that the global economy is going to slow down. If that’s the case, it’s difficult to see why the Australian dollar over the Australian economy would start picking up.
As the Reserve Bank of Australia has sat on their hands a couple of meetings in a row, it looks like they have given up the idea of tightening monetary policy. On the other hand, the Federal Reserve is looking to keep monetary policy tight. It’s probably only a matter of time before we see this interest rate expectation differential play out in the market, and traders run towards safety in the form of US Treasuries.
The Australian dollar is a good barometer of where risk appetite is heading, and it appears that it is not heading in a good direction. The market looks like one that can be sold on rallies, and it’s likely that a breakdown will happen soon. Investing in the Australian dollar is not advisable at this point, as the market continues to be driven by fear and uncertainty.
TLDR; the Australian dollar faces some challenges, as the global economy slows down, and fear and uncertainty continue to weigh on traders. The market could reach the 0.6550 level, and if it breaks down below that, the market will go looking for the 0.65 level. In this environment, the US dollar is likely to strengthen, and risk assets may get pummeled. The bearish flag drawn on the chart opens up the possibility of a move down to the 0.62 level, and traders are running towards safety in the form of US Treasuries. The market looks like one that can be sold on rallies, and it’s likely that a breakdown will happen soon.
Ready to trade our Forex daily forecast? We’ve shortlisted the best Forex brokers in the industry for you.
[ad_2]