AUD/USD Forecast – Aussie Dollar Threatens a Major Breakout

Christopher Lewis
Published: May 15, 2024, 12:23 GMT+00:00

The Australian dollar is currently at the top of a major trading range, threatening a massive breakout. This currency could be a bit of an outlier against the greenback, as it is so heavily influenced by commodities, which of course are doing quite well these days.

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Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has risen to the top of the massive consolidation area that the market is currently paying attention to, which is near the 0.6650 level. At this point, it will come down to inflationary numbers in the United States and whether or not they get people excited.

If we can get above the 0.6650 level, and by above, I mean a daily close, then you may have the signs of a breakout and a potential move toward the 0.6850 region. Obviously, we have been trying everything we can to break out as of late, but just haven’t been able to do it going back several months.

This area has been like a brick wall, and it’ll be interesting to see if it holds again. If it does, we could find the Australian dollar trading down to the 0.6550 level, where the 200-day EMA currently resides. If we break down below there, then it opens up a move down to the bottom of the overall range, near 0.6450. One thing that is helping the Australian dollar is that it is highly leveraged to commodities, and that, of course, has a major influence.

With that being said, I think you’ve got a situation where traders are going to continue to see a lot of choppy volatility, so position sizing will be crucial. In other words, I don’t want to get too heavily exposed to this pair, but I do realize that we are at a major inflection point, and in the next session or two may find ourselves getting involved pretty aggressively once it’s said and done.

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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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