Australian Dollar Technical Forecast for Q3 2020
Australian Dollar Talking Points
- Double Top in play on a daily time-frame suggests near-term downside for AUD/USD
- 2011 downtrend continues to cap topside potential as divergence hints at exhaustion
- Weakness in commodities could intensify selling pressure in the coming weeks
Technical Forecast for Australian Dollar
The Double Top formation on a daily time-frame remains in play as resistance at the psychologically pivotal 70 handle continues to cap bullish potential.
Zooming out to a weekly view highlights the significant hurdles facing AUD with the 2011 downtrend proving to be insurmountable in several past attempts.
Monthly momentum studies are also suggestive of an impending decline as the Momentum indicator struggles to break back into positive territory.
Moreover, the price of commodities tends to influence the performance of the cycle-sensitive Australian Dollar with the recent pullback in iron ore potentially fueling further declines.
To that end, the technical outlook for the Australian Dollar remains tilted to the downside entering the second half of 2020.
--- Written by Daniel Moss, Analyst
Follow me on Twitter at @DanielGMoss
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.