AUD/USD Forecast – Aussie Continues to See Noisy Behavior

Christopher Lewis
Published: May 16, 2024, 12:19 GMT+00:00

The Australian dollar has seen a bit of a pullback at the dawn of Thursday, as the market may have gotten a little overdone. The market might be finding support at the point of the previous breakout.

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Australian Dollar vs US Dollar Technical Analysis

The Aussie dollar initially rallied on Thursday but seems to be running into some trouble. By pulling back, we have to ask the question of whether or not this becomes a breakout, pullback, retest, and then continuation, or if it is another throwover like we had seen just 30 days ago, at the bottom of the longer term consolidation that we had been in.

The Australian dollar, of course, is highly influenced by commodity markets, so it does have that going for it, and commodities, of course, have been very strong. However, if we were to break down below the bottom of the candlestick from the Wednesday session, I think at that point, you have to believe that it is more likely than not just going to be a throwover like we saw last month to the downside.

For the longest time now, we have been consolidating between 0.6650, which is where you would expect to see the support when we come back, and 0.6450 below, where we broke down below and then popped right back up. The Australian dollar, of course, is highly levered to China, so that comes into play.

And at the same time, the US dollar is buoyed by the higher interest rates for longer coming out of the Federal Reserve. Either way, the next day or two should be rather important, so I will be paying close attention to how we behave near the 0.6650 level for my clue as to how to trade this market. The candlestick from the Wednesday session was certainly very strong, so you would have to think again that if we broke down below it, that would mean something.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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