AUD/USD Weekly Price Forecast – Australian Dollar Continues to Test Major Resistance

Australian Dollar vs US Dollar Weekly Technical Analysis

The Australian dollar has rallied rather significantly during the course of the week to test the 200 week EMA and perhaps more importantly, the zero point six eight five zero level. This is an area that I think will continue to be rather difficult to overcome. And the fact that we are struggling is not a huge surprise. The question at this point in time will be whether or not the US dollar continues to crumble based on that 50 basis point rate cut, because quite frankly, it could be a sign of fear. And if that’s a sign of fear, over the longer term, we will see the US dollar strengthen.

Regardless, from a technical analysis standpoint, this stochastic oscillator has crossed in the overbought condition right about when we tested the 0.6850 level. So, a pullback might be necessary. That pullback doesn’t necessarily have to be anything major. It might just be a pullback to the 0.6650 level where we find the 50-week EMA sitting just below.

On the other hand, if we get a daily close above perhaps 0.69, then I think the Australian dollar really starts to take off and maybe goes looking to the 0.6950 level and then the 0.7150 level. All things being equal, this is going to be an interesting chart to watch because it’s a proxy for risk appetite and growth in Asia as the Aussie is so heavily influenced by Asia and of course the commodity markets, as Australian commodities are used widely around the world.

For a look at all of today’s economic events, check out our economic calendar.