AUD/USD Forecast – Aussie Dollar Continues to See Buyers
Australian Dollar vs US Dollar Technical Analysis
The Australian Dollar has rallied a bit during the trading session in the early hours on Thursday, but it looks like the 0.6850 level above is a bit of a barrier that we will have to pay close attention to, as it has been important from a longer term perspective. Keep in mind, this is a market that continues to see a lot of momentum in it, but at this point in time, the question is, how much longer can we go?
All things being equal, this is a situation where I would expect to see a certain amount of resistance at the 0.6850 level, and any signs of exhaustion could have sellers jumping back into the market. That being said, if we can clear this level on a daily close, then I think the Aussie could go much higher. Keep in mind that Friday is the core PCE number that a lot of people will be coming out that suggests what inflation’s like in America. Keep in mind that the Federal Reserve loves the PCE numbers, and it will be a major influence on how they look at the market.
While most people expect the Fed to cut in September, there’s a little bit of exuberance out there as some people, at least in the futures markets, are betting on a 100 basis point rate cut between now and the end of the year, which quite frankly, would signal that the Federal Reserve’s behind the curve and we’re about to see some economic damage. If that’s the case, that won’t help the Aussie long-term. Short-term it might, but longer-term it certainly would work against it. We’re definitely at a point of inflection, and when you zoom out on the chart, you can see just how important this area is. If we were to break above the 0.6850 level easily and handily, that could open up a pretty big move, but we’ll just have to wait and see.
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This article was originally posted on FX Empire