Contents
In the latest trading session, the Australian Dollar took a severe hit, sliding to fresh lows against the USD.
AUD & USD Dollar Technical Analysis
During Tuesday’s trading session, the Australian Dollar experienced a significant downturn. The level dropping well below the critical 0.64 level, ultimately hitting a fresh and substantial low. Market observers note that this currency pair continues to exhibit considerable volatility. However, the Australian Dollar appears to be bearing the brunt of it.
Market Sentiment: “Fade the Rally” Approach
The prevailing sentiment in the market suggests a persistent inclination toward a “fade the rally” approach. The Reserve Bank of Australia’s decision to maintain the current interest rates adds weight to the prevailing pessimistic outlook.
Potential Price Targets
If the market manages to breach the lows set during Tuesday’s trading session, the potential exists for further declines. Thus, there is possibly targeting the 0.63 level. Conversely, should there be a reversal of fortune leading to a rally from the current levels. However, the 0.64 level is anticipated to serve as a formidable resistance point. Beyond that lies the 0.65 level, which has proven to be a substantial hurdle on multiple occasions.
It’s crucial to bear in mind the Australian Dollar’s high sensitivity to the global growth landscape. Consequently, monitoring global economic conditions will be essential in assessing the trajectory of this currency pair. Additionally, the AUD & USD remains closely linked to commodity markets, warranting close attention to developments in that sector as well.
Given the prevailing interest rate differentials favoring the US, a downward trajectory seems plausible in the long run. However, this does not necessarily imply an immediate breakdown. Short-term rallies are likely to be met with skepticism, and any signs of trouble are expected to trigger selling pressure.
Long-Term Momentum Challenge
That being said, should the market manage to surpass the recent micro double top, situated just above the 0.65 level, it could potentially target the 0.66 level. However, achieving this milestone would necessitate a significant surge in momentum, which has proven elusive in the current market climate.
All things considered, the prevailing outlook suggests a sustained downward trend with anticipated volatility in the AUD & USD currency pair.
