- The AUD/USD has shown a slight upward movement during Monday's trading session. It seems the currency is inching towards surpassing the highs observed in the last few days.
- The 0.67 mark is seen as a potential resistance level, but the Aussie dollar will likely aim for the 0.69 level over time.
- This trend suggests that buying the Australian dollar during short-term drops could be a smart move. Many believe that there will be opportunities to buy the currency at a lower price before it climbs again.
Another important factor to consider is the 200-day EMA, currently hovering around the 0.66 level. This indicator is expected to provide significant support. Additionally, the 50-day EMA is quickly approaching the 200-day EMA, hinting at a possible "golden cross" – a bullish signal in market analysis. This scenario indicates a market full of fluctuations but also suggests that many buyers are waiting for the right moment to enter the market.
Federal Reserve Remains Biggest FX Driver
A key influence on the Australian dollar's performance is the actions of the Federal Reserve in the United States. As the Fed seems to be aligning with Wall Street's expectations, the US dollar might weaken further. This is due to the anticipation of reduced interest rates in the U.S. The Federal Reserve is expected to cut interest rates two or three times in 2024, which has affected the strength of the US dollar. However, if traders start to worry about the reasons behind the Federal Reserve's decision to cut rates – possibly due to a looming crisis – the US dollar might regain its strength. In times of uncertainty, the US dollar is often considered a haven.
On the other hand, the Australian dollar is closely linked to the performance of global commodities and overall economic growth. As we approach the holiday season, it's also important to note that trading might be influenced by reduced market liquidity. In conclusion, while there's an expectation for the Australian dollar to rise in the short term, traders should also be mindful of the potential changes in market dynamics, especially those related to global economic conditions and monetary policies and of course all things Asia-related. The AUD/USD pair seems as if the end of the year should be decent, but liquidity is also a question going forward.
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