AUD/USD Forecast: Near-term outlook appears deteriorated

AUD/USD collapsed to the vicinity of 0.6500.
The sharp bounce in the Greenback kept the AUD under pressure.
The focus has now shifted to the 2024 low near 0.6480.

Pablo Piovano FXStreet

The strong resumption of the bid bias in the US Dollar (USD) prompted an equally marked retracement in the Aussie dollar and the rest of its risk-related peers, pushing AUD/USD to multi-session lows near 0.6500 on Wednesday.

In the meantime, the strong rebound in iron ore prices failed to mitigate the increased downward trend of the Australian dollar, while the knee-jerk in copper prices accompanied the daily pullback in spot.

Regarding the Reserve Bank of Australia (RBA), the recent release of its March meeting Minutes affirmed the bank's stance to refrain from considering tightening monetary policy. RBA cash rate futures still indicate an expectation of just under 50 bps of policy rate cuts in 2024, with the initial cut anticipated in November.

It's worth noting that the RBA is among the last G10 central banks expected to contemplate interest rate adjustments this year.

With the Federal Reserve's (Fed) reinforced stance on maintaining tighter policies over an extended period, accentuated by recent US inflation data, and the anticipation of the RBA beginning an easing cycle later in the year, AUD/USD faces increased potential for extended and intensified downward movements in both the short and medium terms.

AUD/USD daily chart

AUD/USD short-term technical outlook

If sellers remain in control, AUD/USD could fall to the April low of 0.6480 (April 1), followed by the March low of 0.6477 (March 5) and the 2024 bottom of 0.6442 (February 13). Breaking below this level may result in a test of the 2023 low of 0.6270 (October 26), prior to the round level of 0.6200.

Further upward is projected to initially test the April top of 0.6644 prior to the March peak of 0.6667 (March 8) and the December 2023 high of 0.6871. Further north, the July top of 0.6894 (July 14) precedes the June peak of 0.6899 (June 16) and the critical 0.7000 mark.

Looking at the big picture, the pair is projected to maintain its bearish trend while below the important 200-day SMA.

On the 4-hour chart, the pair's constructive bias appears threatened. The support comes at 0.6498 ahead of 0.6480. On the other hand, immediate resistance is at 0.6644, before 0.6667. Furthermore, the MACD stayed bullish, and the RSI fell to around 31.

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.