AUD/USD Forecast: Dollar Runs into Resistance
The current situation with the Australian dollar highlights the importance of monitoring global events and economic indicators.
The current formation of a rising wedge suggests a bearish outlook for the currency. If the wedge kicks off to the downside, breaking down below the bottom of the wedge could lead to a move down to 0.6550 or even lower. The Australian dollar is often considered a risk currency, meaning that investors tend to move towards it in times of “risk on appetite” and away from it when risk appetite evaporates. With the global economy experiencing a lot of uncertainty at the moment, it is understandable that the Australian dollar is struggling.
However, if the Australian dollar manages to break above the 0.68 level, it could open up a move for 100 pips or so, with the 200-Day EMA being tested. This would be a good sign for risk appetite and a poor sign for the US dollar. It is likely that the US dollar would start falling against almost everything in such an environment.
Despite this, the current outlook suggests that risk appetite is waning, and the US dollar will probably come out ahead eventually. It is important to keep an eye on positions and keep them reasonably sized as volatility could pick up along the way.
The current situation with the Australian dollar highlights the importance of monitoring global events and economic indicators. As investors, it is crucial to stay informed and adapt our strategies accordingly. The volatility in the foreign exchange market can provide opportunities, but it can also lead to significant losses if positions are not managed correctly.
At the end of the day, the Australian dollar’s recent rally and struggles around the 0.67 level are important indicators to watch. The formation of a rising wedge suggests a bearish outlook for the currency while breaking above the 0.68 level could lead to a move toward the 200-Day EMA. Investors should keep an eye on their positions and adapt their strategies as needed to manage the volatility in the market.