Skip to content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Australian Dollar Forecast: Key AUD/USD Levels to Watch as US Dollar Capitulates

Australian Dollar Forecast: Key AUD/USD Levels to Watch as US Dollar Capitulates

Justin McQueen, Strategist

Australian Dollar Analysis and Talking Points

  • AUD/USD | US Dollar Capitulation Boosts Aussie
  • RBA QE is a Material Risk to the Australian Dollar
  • Resistance Situated at 0.6660-70

AUD/USD | As US treasury yields plummet with the 10yr falling to a record low 0.77% (at the time of writing), the US Dollar has continued its precipitous decline. In turn, despite the RBA cutting interest rates to 0.50% amid the expected hit to growth from coronavirus, the Australian Dollar is on course for its strongest week since July 2017, gaining over 2% against the greenback. However, we see caution in chasing the currency higher, given that price action is likely to remain dictated by risk appetite, which remains tilted to the downside. Alongside this, we highlighted last year that with Australian interest rates heading towards the effective lower bound (0.25%), there is a material risk that the RBA is heading towards QE. Equity markets remain fragile leaving the Aussie particularly vulnerable to low yielders (JPY, EUR, CHF).

AUD/USD Bearish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 1% -6% -1%
Weekly -2% -3% -2%
Learn How to Use Sentiment in Your Trading Strategy
Get My Guide

On the technical front, despite the bounce from 0.6600 with risks of more unconventional measures from the RBA we see risks in chasing AUD higher and thus we expect gains to be relatively short lived. First notable test of resistance is situated at 0.6660-70, which will provide an opportunity to see how strong this relief rally is for the Aussie. Failure to make a firm break leaves the currency vulnerable to a retest of the 0.6600 handle.

Starts in:
Live now:
Oct 10
( 12:10 GMT )
Recommended by Justin McQueen
Weekly Scalping Webinar
Register for webinar
Join now
Webinar has ended

AUD/USD Vanilla Options: 0.6600-05 (730mln)

Implied Weekly range (0.6550-0.6730)

SupportResistance
0.6550-0.6660-70Prior Support
0.6500-0.6730Weekly High
0.6288Mar’09 Low0.6750-

AUD/USD Price Chart: Weekly Time Frame

Source: IG Charts

--- Written by Justin McQueen, Market Analyst

Follow Justin on Twitter @JMcQueenFX

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

DISCLOSURES