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Australian Dollar (AUD) Forecast: AUD/USD, AUD/JPY, AUD/NZD

Australian Dollar (AUD) Forecast: AUD/USD, AUD/JPY, AUD/NZD

2020-02-08 15:30:00
Peter Hanks, Analyst
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Australian Dollar Price Outlook:

  • AUD/USD tested support around 0.6678 before probing trendline resistance overhead and retreating
  • AUD/JPY has encountered a topside barrier around 74
  • Elsewhere, AUD/NZD will look to pierce a price barrier around 1.0435

AUD/USD Technical Forecast

The Australian Dollar has suffered as US Dollar strength and risk aversion has worked to pressure AUD/USD to longstanding support around 0.6678. The level has helped to buoy price multiple times in recent months, but continued retests could speak to further bearishness ahead. In pursuit a recovery rally, AUD/USD will have to reclaim horizontal support and breach the descending trendline overhead.

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

AUDUSD Price Chart

That being said, a brief test below the level on Friday could have opened the door to further losses. Trading at an 11-year low already, a confirmed break beneath the line may allow USD bulls to press to 0.6560 due to the scarcity of technical support. Consequently, the risk-reward profile of AUD/USD is tilted to the downside in my opinion. IG Client Sentiment Data also suggests further losses may be in store as the vast majority of retail traders are net-long.

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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AUD/JPY Technical Forecast

Similar price action is observable in AUD/JPY as a brief rally last week was quickly reversed after probing resistance around 74. With a daily close beneath the descending trendline around 73.40, AUD/JPY has been left vulnerable to further losses in the coming week. Therefore, the pair may test 72.48 in an attempt to break lower and probe support around 72.

AUD/JPY Price Chart: 4 – Hour Time Frame (September 2019 – February 2020)

AUDJPY Price Chart
AUD/JPY MIXED
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 2% -11% -7%
Weekly -14% 27% 10%
What does it mean for price action?
Get My Guide

Sentiment is similarly bearish as a majority of IG Clients favor AUD/JPY strength. Sign up for my webinar below to learn how to incorporate IG Client Sentiment Data in your trading strategy. In the meantime, follow @PeterHanksFX on Twitter for updates and analysis.

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AUD/NZD Forecast

In pursuit of Aussie strength, AUD/NZD may be an attractive pair over the longer term, but it stands at an unappealing position from a risk-reward perspective at present. After rallying versus the Kiwi last week, the pair has encountered confluent resistance around 1.0435. Together, the barriers will look to spark a reversal lower which could see AUD/NZD return to Fibonacci support around 1.0352 before a run at 1.03 can be attempted.

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

AUDNZD Price Chart

Considering the current standing of AUD/NZD, it may be prudent for a more attractive set up as the long lower wick on Friday’s daily candle speaks to sustained bullish interest but technical resistance looms immediately overhead.

--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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