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
AUD/USD Forecast: Downside Potential for Aussie Despite China Policy Support

AUD/USD Forecast: Downside Potential for Aussie Despite China Policy Support

Warren Venketas, Analyst
What's on this page

AUD/USD ANALYSIS & TALKING POINTS

  • Mixed Chinese dynamics curtail policy optimism.
  • Rising wedge breakout exposes potential leg lower for AUD/USD.
AUD Forecast
AUD Forecast
Recommended by Warren Venketas
Get Your Free AUD Forecast
Get My Guide

AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP

Trade Smarter - Sign up for the DailyFX Newsletter

Receive timely and compelling market commentary from the DailyFX team

Subscribe to Newsletter

The pro-growth Australian dollar is trading marginally higher this Monday against the USD. This comes after China announced their intention to stimulate the economy via loose monetary policy and fiscal support. Price appreciation may have been significantly higher however concerns around rising COVID cases weighed down on AUD gains. Overall markets are exhibiting a feeling of ‘risk-on’ sentiment, reflected by broad based commodity gains – additional sustenance for the Aussie dollar.

Looking ahead, the economic calendar (see below) is unlikely to impact AUD price action although the rest of the week holds several high impact U.S. centric data points. This being said, after guidance received from the Fed last week, these releases may be minimized.

ECONOMIC CALENDAR

image1.png

Source: DailyFX economic calendar

TECHNICAL ANALYSIS

Introduction to Technical Analysis

Candlestick Patterns

Recommended by Warren Venketas

Start Course

AUD/USD DAILY CHART

image2.png

Chart prepared by Warren Venketas, IG

Daily AUD/USD price action reveals a confirmed break below the rising wedge pattern (black). The next breaking point comes via the psychological 0.6700 support handle with a daily candle close below this level possibly opening up the 0.6585 swing low. Bearish/negative divergence remains indicative by the opposing Relative Strength Index (RSI) (lower highs) and AUD/USD (higher highs) price, traditionally leading to subsequent downside.

Key resistance levels:

Key support levels:

  • 0.6700
  • 0.6585

IG CLIENT SENTIMENT DATA: MIXED

IGCS shows retail traders are currently LONG on AUD/USD, with 68% of traders currently holding long positions. At DailyFX we typically take a contrarian view to crowd sentiment but recent changes in long and short positioning result in a short-term cautious bias.

Contact and followWarrenon Twitter:@WVenketas

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

DISCLOSURES