AUD/USD Forecast – Australian Dollar Continues to Look a Bit Lackluster

Christopher Lewis
Updated: Mar 5, 2024, 13:08 UTC

The Australian dollar continues to drift around as we are trying to find some type of bigger move but may not see it anytime soon. With this, you will have to trade it based on short-term charges more than anything else I suppose.

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Australian Dollar vs US Dollar Technical Analysis

The Aussie dollar dipped below the 0.65 level during early hours on Tuesday, as we continue to see a lot of choppy behavior. This is a market that I believe continues to look at this as a bit of a magnet for price, and it does make a certain amount of sense considering that the 0.65 level is an area that previously had been extreme resistance. So, I would assume a bit of market memory comes into the picture here.

Underneath we have the 0.6450 level, and that of course is an area that I think a lot of people will be paying attention to due to the fact that we had a recent swing low there. Above we have the 50-day EMA, followed by the 200-day EMA, followed by the 0.66 level as potential resistance barriers. If we break out of this range, it makes a certain amount of sense that a lot of people will jump in and try to take advantage of momentum.

It is somewhat difficult to find a reason to get overly aggressive in one direction or the other for anything more than a short-term trade at the moment, as the Australian dollar seems to be lackluster in its performance, but it’s not necessarily melting down either. Remember, the Australian dollar is driven by the Asian economy, the idea of global growth, and of course, the other side of the equation is the United States dollar and Federal Reserve monetary policy which although tight, should at least in theory be loosening up later this year.

With that being said, I think you have the perfect making of a range-bound pair and that might be the case for most of the year but if we do break down below that 0.6450 level, take a look around the world of Forex because you may see the US dollar strengthening against almost everything at the same time. And at that point, I think 0.63 would be almost a given. Remember, the Australian dollar is all about risk appetite, so you have to gauge that as well.

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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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