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AUD/USD Forecast: The Australian dollar is still under pressure to rise

AUD/USD pressured to rise amid US rate cut prospects and weak jobs data. Key resistance at 0.69, with cautious trading advised on potential pullbacks.

  • The Australian dollar saw a considerable increase during Friday's trading session as traders continued to bet on the possibility of a rate cut by the Federal Reserve and the jobs report came in far lower than expected.
  • This has put pressure on the US dollar in general, and therefore it makes a lot of sense that this pair has risen.

AUD/USD Forecast Today - 11/03: AUD Upward Pressure (Graph)


A major resistance level was breached by the Australian dollar during Friday's trading session, coinciding with the disappointing US jobs report. The implication is that there could be a few rate reductions this year, which many traders have been smelling for some time. In my opinion, this is just more of the same.

Having said that, the US dollar has suffered as a result of this perception as well as Jerome Powell's comments this week suggesting that rate cuts later in the year would likely be prudent. Everything fits together rather well in favor of the declining US dollar. Naturally, the question arises as to whether the economy, which is extremely dependent on growth and international trade, can sustain the Australian dollar. All things considered; this market provides a useful indicator of world events.

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    Having said that, I believe you need to view this as a potentially erratic market even though it appears to be headed higher. The 0.69 level represents a significant resistance barrier that I believe is hard to overcome given enough time, so I believe that's probably as high as we can go. Additionally, if the Federal Reserve seems to be acting more or less panicked when it cuts interest rates, we might witness a large sell off.

    It does make sense, after all, that traders will continue to flee to the US dollar for safety if the world economy is collapsing. Thus, keep all of this in mind. On any pullback, I would be especially cautious around the 0.66 level. It presents a good opportunity to purchase if it provides support. This would turn into a bit of a false breakout if we were to break back below that point. Observe interest rates. That's going to be your helping hand when it comes to trading this market going forward.

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    Christopher Lewis
    About Christopher Lewis

    Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.


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