AUD/USD Trading Outlook

Analysis from UOB Group suggests that the Australian Dollar (AUD) is unlikely to experience significant further weakening against the US Dollar (USD). The AUD/USD pair is expected to trade within a relatively low range of 0.6420 to 0.6455.

Over the longer term, analysts Quek Ser Leang and Peter Chia believe that the risk is skewed towards the downside for the Australian Dollar, with a potential move towards the 0.6420 level.

Detailed Breakdown of the Forecast

24-Hour View: Following a sharp decline in the AUD, forecasts indicate that the downward momentum might be slowing, and any further decline may not reach the month-to-date low near 0.6420. The AUD/USD pair is expected to trade in a lower range today, likely between 0.6420 and 0.6455.

1-3 Weeks View: The outlook has been revised to negative, suggesting increasing downward momentum and a tilt in risk towards the downside for the AUD, targeting 0.6420. The AUD/USD needs to break and hold below this level before further sustained decline can be anticipated. As long as the strong resistance level at 0.6485 is not breached, the negative outlook remains. If the AUD/USD pair clearly breaks below 0.6420, the levels to watch are 0.6400 and 0.6375.

Factors Influencing the Australian Dollar

The value of the Australian Dollar is influenced by various global and domestic economic factors, including:

  • Commodity Prices: The AUD is considered a commodity currency, as Australia relies heavily on exporting commodities such as iron ore and coal.
  • Interest Rates: Decisions by the Reserve Bank of Australia (RBA) regarding interest rates affect the attractiveness of the AUD to foreign investors.
  • Economic Growth: Economic growth in Australia and China (Australia's main trading partner) impacts the value of the AUD.
  • Global Risks: During times of global economic uncertainty, investors tend to seek safe havens in other currencies like the USD, which can put pressure on the AUD.

Risk Warning and Disclaimer: This article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform. Trading Contracts for Difference (CFDs) involves high leverage and significant risks. Before making any trading decisions, we recommend consulting a professional financial advisor to assess your financial situation and risk tolerance. Any trading decisions based on this article are at your own risk.

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