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Australian Dollar Price Outlook: AUD/USD, AUD/JPY, AUD/NZD

Australian Dollar Price Outlook: AUD/USD, AUD/JPY, AUD/NZD

2020-02-18 19:30:00
Peter Hanks, Analyst
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Australian Dollar Forecast:

  • AUD/USD teeters on support after continued Aussie weakness threatens to send the pair lower
  • Sentiment-linked AUD/JPY moved off support after early pressure but remains endangered
  • AUD/NZD may be a unique opportunity for AUD strength, but concerns linger

AUD/USD Price Forecast

The Australian Dollar slipped lower against most major pairs on Tuesday after coronavirus concerns emerged following Apple’s earnings revision.While there is data to suggest the Australian Dollar and ASX 200 can weather the recent hit to economic growth, fading risk appetite elsewhere – like the Dow Jones and Nasdaq – could hint a broader decline for risk assets is brewing. Similarly, a bullish break higher for gold could indicate a growing demand for safety.

AUD/USD Price Chart: Daily Time Frame (November 2018 – February 2020)

australian dollar price chart

Nevertheless, the US equity market has shown an insatiable appetite for gains despite a flurry of headwinds so prolonged risk aversion is far from certain, but continued tests of support around the 0.6678 level highlight persistent bearish interest.

AUD/USD BULLISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -20% -4% -9%
Weekly 1% 8% 6%
What does it mean for price action?
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Further, IG Client Sentiment Data reveals an overwhelming majority of retail traders are bullish on the pair which could suggest further losses. To that end, a break beneath the 0.6678 level would effectively open the door lower and may allow the pair to test 0.6560.

AUD/JPY Price Forecast

Looking to AUD/JPY, two-fold resistance at the 74 level will aim to keep the Australian Dollar contained in conjunction with damaged risk sentiment. On the other hand, a descending trendline that coincides with various swing-highs dating back to December 2018 may provide a sliver of support in the days ahead. Still, recent breaks beneath the level have worked to reduce its efficacy which may see AUD/JPY probe subsequent support around the 72.48 level – marked by the June 2016 swing low.

AUD/JPY Price Chart: Daily Time Frame (December 2018 – February 2020)

australian dollar, japanese yen price chart

AUD/NZD Price Forecast

While AUD/USD and AUD/JPY will look to broader macroeconomic themes and risk sentiment, AUD/NZD may take its cues from developments within the two respective economies. Consequently, impending Australian employment data could lead to a change in RBA rate cut odds, as recent strength in employment figures has been a notable factor in Aussie’s resilience.

AUD/NZD Price Chart: Daily Time Frame (January 2019 – February 2020)

australian dollar, japanese yen price chart

In turn, AUD/NZD volatility may pick up as the pair looks to distill broader macroeconomic trends down to the relative expected policy paths between the RBA and RBNZ. As it stands, the Australian Dollar has rallied versus the New Zealand Dollar in February, but resistance around 1.0500 looms overhead – followed by two barriers near the 1.0555 level. As the Australian Dollar searches for direction against its various counterparts, follow @PeterHanksFX on Twitter for updates and analysis,

--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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