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AUD/USD Forecast – Australian Dollar Continues to See Questions Asked

By:
Christopher Lewis
Updated: Jun 2, 2024, 09:58 GMT+00:00

The Aussie continues to see a lot of noise, as we had recently broke above the top of a major consolidation rectangle form the past several months. However, it seems as if we are continuing to see a lot of hesitation at this point.

In this article:

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has initially tried to rally during the Friday session, only to turn around and show signs of hesitation. We formed a hammer during the previous session. So that does suggest that we are in the midst of consolidation yet again, and maybe indecision. When you look at this area at the end of last year and early January, it was very noisy and choppy, so it’s probably not a huge surprise. And now the question is, which way do we break? Do we break down below the 0.6650 level and head back into the previous consolidation? Or do we take off to the upside, clearing the highs of last week, and perhaps try to get to the 0.68 level?

This is a pair that is going to be very noisy because you can make several arguments for it and several arguments against it. Geopolitically speaking, it makes more sense to have the US dollar at the moment than it does the Australian dollar. However, commodity markets, of course, have been on fire and that helps the Australian dollar.

So, you get a lot of push-pull. I think this is a market where you need to see which way we break next and then aim for maybe 75 pips. It’s not going to be a big mover at this point. It is a little bit stretched, but what the chart does look like is the exact opposite of what happened last month when we broke down below support. Did we just witness a throw over or are we building up pressure to the upside? That’s the real question right now. And hence my cautiousness when trading this particular pair.

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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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