AUD/USD Forecast – Aussie Continues to Tread Water

Australian Dollar vs US Dollar Technical Analysis

Taking a look at the Australian dollar you can see that we have been hanging around the 0.66 level, an area that has been resistant previously and therefore it does make a lot of sense that we will continue to look at this as a bit of a fulcrum for price, as we have visited it several times now, and there has been a bit of a reaction multiple times.

Underneath, we have the 200 day EMA that could come into the picture offering support, but if we rally from here, then we have the shooting star that formed on Friday that could offer resistance all the way to the 0.6675 level. At this point, I think we’re waiting to see what the CPI numbers will be and whether or not they show signs of inflation in the United States.

A short term pullback does make a certain amount of sense as we would go in the middle of the consolidation range, where the 0.65 level underneath is an area that I think offers quite a bit of support. In general, I think we have to look at this as a scenario in which we’re probably more supported than resisted, but that CPI number can change things quite rapidly if we do break out to the upside, we could go looking all the way to the 0.69 level.

But keep in mind that the Australian dollar needs more of a risk on type appetite around the world, so we’ll see how that plays out. You also have to pay attention to Asia and what commodities are doing in general underneath. If we were to break the 0.65 level, it opens up a move down to 0.6450. Currently, people are paying more attention to the fact that the Federal Reserve is going to cut rates later this year than anything else. So, at this point, it certainly looks like people are willing to at least support this currency.

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