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Australian Dollar Forecast: Key AUD/USD Levels to Watch

Australian Dollar Forecast: Key AUD/USD Levels to Watch

2020-01-16 09:10:00
Justin McQueen, Analyst
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Australian Dollar Analysis and Talking Points

  • AUD/USD | Consolidating Above 200DMA, Risk Sentiment Supports
  • Australian Dollar Eyes Critical Jobs Data
  • Rising RBA Rate Cut Expectations Likely to Spark Reversal

AUD/USD | Consolidating Above 200DMA, Risk Sentiment Supports

AUD/USD has managed to consolidate above its 200DMA (0.6864) as risk sentiment remains positive with equity markets going from strength to strength. This has been particularly evident in the ASX 200, which has risen over 5% in the past 10 trading sessions, trading above 7000 for the first time in history. However, with a rate cut from the RBA at the February meeting remaining the balance, the Australian jobs report (Jan 23rd) and CPI data (Jan 29th) over the coming weeks, will be crucial to the Australian Dollar. As such, with markets pricing in a 44% chance of a 25bps rate cut, softer economic figures are likely to see the pair break back below 0.6900 and make a retest of the 200DMA.

AUD/USD MIXED
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 5% 6% 6%
Weekly 8% -2% 4%
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On the technical front, momentum indicators signal that AUD/USD is lacking in terms of notable direction with both positive and negative DMIs trending lower. Throughout today’s session, upside the pair may be limited with $1bln worth of vanilla options situated at 0.6930-35.

AUD/USD Vanilla options: 0.6875 (885mln), 0.6905-20 (1.1bln), 0.6930-35 (1bln).

Implied 1-Week range (0.6860 – 0.6960)

Support

Resistance

0.6876

50DMA

0.6930-35

Vanilla Options

0.6864

200DMA

0.6940

December 12th Peak

0.6830

Trendline Support

0.6950

-

AUD/USD Price Chart: Daily Time Frame (Feb 2019 Jan 2020)

Australian Dollar Forecast: Key AUD/USD Levels to Watch

Source: IG Charts

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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