AUD/USD Forecast – Aussie Continues to Look Lost

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar initially rallied during the trading session on Thursday, but it has since given back quite a bit of the gains. It doesn’t really matter though, because we are in the same general vicinity that we have been in for multiple weeks now.

The 0.6650 level continues to be an area of interest for traders overall, as it’s a bit of a magnet for price. Ultimately, this is a market that I think you need to pay close attention to because even when it breaks in one direction or the other, it could be a big deal for the US dollar overall. If we were to break above the 0.6725 level, that would be very bullish for the Aussie, and probably a period of negativity for the greenback. On the other hand, if we break down below the 0.66 level and, by extension, the 50 day EMA and the 200 day EMA, it could be very strong for the US dollar.

Right now, I think confusion reigns. And when you look at major currency pairs across the world, there doesn’t really seem to be a lot of conviction one way or the other. The European Central Bank decided to cut rates this morning on Thursday, so that might have a little bit of effect on what we’re seeing here as people run to the dollar away from the Australian dollar and concerns that perhaps Europe won’t stimulate their economy and therefore driving down demand for commodities out of Australia.

I don’t know. At this point, that’s just the theory. But what I do see on the chart is a very sideways marketplace that just doesn’t seemingly have any real conviction. And as long as that’s the case, you are probably relegated to short term sideways trading at best.

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