The Australian dollar has been very noisy during the trading session on Thursday as we continue to chop back and forth.
This is not a huge surprise because, quite frankly, when you look at the overall market, and by overall market I mean well beyond currencies, the reality is that traders really don't know what to do.
And that being said, it's interesting to see that the 0.6950 level continues to offer support. And as long as we can stay above there, I think there's a chance that we bounce, but you also have to keep in mind that the Reserve Bank of Australia is now possibly looking at cutting rates, according to what many traders think.
That being said, it's worth noting that the local numbers inflation-wise and growth-wise in Australia are starting to slow down. So, I think we're at a point of inflection here in the AUD/USD pair. It's worth noting that the 200-day EMA sits just below there as well, so ultimately, I think this is a situation where we are trying to figure out where we are going longer term.
Key Levels and Technical Outlook
If we do bounce from here, pay close attention to the 0.71 level. If we break above there, then the 0.7150 level is a potential target. Breaking below the 200-day EMA opens up the possibility of a drop down to the 0.67 level.
Top Regulated Brokers
I'm watching for a large candlestick somewhere in this area to start following, and the Australian dollar is worth paying close attention to. I think all things being equal, this is a market that I think continues to see a lot of volatility and choppiness.
I think you need to watch the 10-year yield in the United States, which probably gives you a little bit of a guide. If the yield starts to rise and the Aussie starts to sell off, that would be the normal correlation, although we are starting to see correlations around the world break down. Watch the 0.6950 level, that should tell you everything.
Ready to trade our AUD/USD Forex forecast? Here’s a list of some of the best Australian forex brokers to check out.