(MENAFN- Daily Forex) The aud/usd has experienced a slight rally against the US dollar during Thursday's trading session, attempting to recover from the recent selloff. Over the past couple of days, the currency pair has fluctuated between 0.66 and 0.67, leaving traders uncertain whether the pair will break out of this range or continue trading within this vicinity.
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A closer look at the price action over the last several weeks reveals a predominantly negative trend, suggesting that the Australian dollar may continue to weaken in the short term. The 0.67 level has held significant importance on multiple occasions in the past, which indicates that this level is likely to remain a key area of interest for market participants. Even if the Australian dollar manages to break above the 0.67 level, challenges lie ahead as the currency would then face resistance in the consolidation area that extends up to the 0.68 level. As a result, a breakout to the upside may prove difficult.
The 50-Day Exponential Moving Average (ema ) is situated near the 0.68 level and is currently declining rapidly, implying that substantial selling pressure may be present. A decisive move above the 0.68 level would be needed for the market to exhibit a strong bullish trend.Currency Could Further Decline
On the downside, if the Australian dollar breaks below the 0.6550 level, the currency may be poised for further declines, possibly reaching the 0.63 level. The Australian dollar is often associated with risk appetite, making it susceptible to shifts in market sentiment. In a market environment characterized by fear and uncertainty, the Australian dollar is likely to face ongoing challenges.
Moreover, the upcoming Federal Reserve interest rate decision scheduled for next week is poised to have a significant impact on the currency pair's movement. Market participants will be closely monitoring the decision, which could serve as a catalyst for either a bullish or bearish breakout.
Considering recent price action and external factors, such as the anticipated federal reserve decision, the Australian dollar's performance against the US dollar remains uncertain. While the currency has shown signs of a rally, traders should exercise caution as resistance levels at 0.67 and 0.68 may hinder any potential bullish breakouts. Similarly, breaking below the 0.6550 level could lead to a bearish decline. Navigating this uncertain market environment will require traders to remain vigilant and responsive to moves in the bond markets.
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