Australian Dollar Forecast: Key AUD/USD Levels to Watch, Breakdown Ahead
Australian Dollar Analysis and Talking Points
- AUD/USD | Vulnerable to the Downside
- Australian Dollar Rallies Offer Attractive Pullbacks
- Break of 0.6000 Could Extend Move Towards 0.5800
AUD/USD | Vulnerable to the Downside
Throughout the week, we had been signalling that the recent surge in equity markets had been nothing more than a bear market rally, which is typically common following a plethora of stimulus measures. Alongside this, equity inflows in the run up to month and quarter end portfolio rebalancing had also provided support. However, with this now out the way, we see risks remain skewed to the downside in the coming weeks with the potential for equities to retest the lows. As such, the Australian Dollar is likely to remain vulnerable in the short run with rallies in the currency offering attractive levels for pullbacks.
Australian Dollar Technical Outlook
Once again, AUD/USD has topped out at 0.6200, which in turn puts pressure back on the 0.6000 handle with a closing break below raising the risk of move towards 0.5800. Keep in mind, that when equity markets are selling off, the Australian Dollar is among the primary underperformers in currency markets, particularly against the US Dollar and Japanese Yen.
Implied Weekly range (0.5850-0.6200)
AUD/USD Price Chart: Daily 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.