Market News

On the Verge of a Break: AUD/USD Analysis and Forecast

AUD/USD analysis

Explore the potential break-in and analysis of AUD/USD, providing insights and forecasts for informed decision-making.

ANALYSIS & HIGHLIGHTS for AUD/USD

The recent Australian retail sales figures indicate that the high-interest rate environment might negatively affect consumers.

Later today, the focus will be on US economic data and speeches from Federal Reserve officials.

A break below the 200-day Moving Average (MA) for AUD/USD could expose long-term trendline resistance.

FUNDAMENTAL BACKGROUND OF THE AUSTRALIAN DOLLAR

The Australian dollar’s response to this morning’s retail sales report suggests a return to negative territory, indicating a potential impact of the current restrictive monetary policy on the Australian economy, particularly households. While one data point does not establish a trend, the continued decline in spending habits could prompt the Reserve Bank of Australia (RBA) to address lower inflation. RBA Governor Bullock expressed a cautious stance in her statements:

“We’re in a period where we must be a bit careful.”

“I want to avoid imposing too much and pushing up the jobless.”

“We need to ensure that inflation expectations stay anchored.”

“Monetary policy is restrictive and is dampening demand.”

On the Verge of a Break: AUD/USD Analysis and Forecast

Meanwhile, PBoC’s Governor Pan’s statement on accommodating monetary policy may have supported the pro-growth Australian dollar.

RBA money market pricing indicates the possibility of an additional interest rate hike, underscoring the importance of forthcoming data.

From a US perspective, recent bond auctions saw yields fall, making the sale less attractive for investors. The depressed 2-year Treasury yield has supported the AUD against the subdued US dollar. Fed rate cut expectations are rising, contributing to a bearish 2024 outlook for the USD.

Looking at AUD/USD, the recent break above the 200-day moving average resistance is noteworthy, with the pair approaching the 0.6596 swing high. The Relative Strength Index (RSI) nearing overbought territory suggests the potential for further upside, possibly coinciding with the long-term trendline resistance zone before a potential pullback. However, the current daily candle with a long upper wick may indicate downside risk if the daily close remains as such.

Key Levels

Resistance: 0.6700 (Trendline resistance), 0.6596

Support: 0.6500 (200-day MA), 0.6459, 0.6358 (50-day MA)

IG CLIENT SENTIMENT DATA

IG Client Sentiment (IGCS) shows that retail traders are currently net LONG on AUD/USD, with 55% holding long positions.

Stay Updated with the Latest Market News. Visit our YouTube Channel for the Latest Forex Analysis.

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Our Newsletter

Subscribe to ForexPropNews Trading Newsletters

Receive the best-curated content by our editors for the week ahead.

Mini Charts

Fidelcrest video review

Play Video

Related Articles

Dow and Nasdaq Near Peaks, Hang Seng Rally Strong

Global markets show Dow Jones and Nasdaq 100 nearing record highs, while...

Gold Bulls Stifled by Resistance as Focus Shifts to US PCE

Gold prices retreated on Monday, pressured by rising U.S. Treasury yields, with...

Crypto Stock Surge as Market Hits New Highs

Bitcoin and Ethereum surge to $57k and $3,275 respectively, driven by strong...

USD/CAD: H1 Support is in Play

USD/CAD -Technical Analysis- H4 Chart The chart shows that the price made...

Featured educational content

EXPLORE MORE

Featured educational content

New to Forex? Learn to Read Charts Like a Pro

Dive into forex trading basics: chart reading, candlesticks, technical indicators, timeframes, currency pairs. Start your journey to trading success today!

Video: How I Re-Programmed My Mind to be a Consistent Trader (Thanks to The Wolf of Wall Street)

How I Re-Programmed My Mind to be a Killer Trader (Thanks to The Wolf of Wall Street)

Video: This Invisible Trading Indicator Tells you What Day Trade (Not Just Price)

This Invisible Trading Indicator Tells you WHEN to Trade (Not Just Where)

Technical Analysis: Chart Patterns and Indicators for Profitable Investments

Navigate stocks with confidence using chart patterns like Head and Shoulders, indicators such as MACD, and tools like trendlines. Master technical analysis for...

Latest News

Dow Nasdaq Hang Seng
Market News

Dow and Nasdaq Near Peaks, Hang Seng Rally Strong

Global markets show Dow Jones and Nasdaq 100 nearing record highs, while Hang Seng Index rallies above 100-day SMA.

Gold US PCE
Market News

Gold Bulls Stifled by Resistance as Focus Shifts to US PCE

Gold prices retreated on Monday, pressured by rising U.S. Treasury yields, with investors eyeing the upcoming US PCE data release.

Copyright © 2023 Forex Prop News. All Rights Reserved.