AUD/USD Forecast – Australian Dollar Continues to Grind

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied slightly during the early hours on Monday bouncing from the 200 day EMA and now seems to be attempting to recapture the 0.66 level. If it does, I don’t necessarily think that it is a sign of bullishness for the Australian dollar. Rather, it is a sign of just continued consolidation and sideways action.

That wouldn’t be a huge surprise because basically we were acting like we had nowhere to be anytime soon for a couple of weeks and it didn’t seem like we were ready to make a huge move. Keep in mind that the Australian dollar is highly influenced by commodities and global trade. And of course, the US dollar is influenced mainly by the rates that we see in the treasury market and global risk appetite.

So if risk appetite starts to fall off, that will be a little bit of a double whammy for this pair because people will run to the dollar and then they could very well price commodities lower unless of course it is a commodity related issue. If we break down from here and get below the 0.6550 level, then I think we go look into the 0.6450 level. Nonetheless, I think this is going to be a sloppy couple of months in the Australian dollar like we have seen in several major currency pairs and at this point in time, I think it’s just range-bound back-and-forth trading is a majority of what people are expecting and doing in this pair.

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