(MENAFN- Daily Forex) The aud/usd exhibited a slight rebound during Friday's trading session, showing signs of life after experiencing a significant selloff. However, this recovery could be a temporary phenomenon, commonly called a "dead cat bounce," as markets can sometimes exhibit prolonged directional movements. It is anticipated that the 0.66 level will serve as significant resistance, given its previous role as a support level. This behavior, known as "market memory," is expected to influence market participants' perception of the level.
It is important to note that the Australian dollar is highly sensitive to commodity markets, so it is advisable to closely monitor developments in those markets. Ultimately, market participants are expected to continue to seek the safety of the US dollar, given the presence of several recessionary headwinds that could impede global economic growth. Consequently, we will likely witness a back-and-forth pattern in the Australian dollar's movement, with reactions driven by overall fear prevailing in the market. In the event of a breakthrough above the 0.66 level, it would undoubtedly be a bullish signal. However, traders should be aware that the 50-Day Exponential Moving Average will likely present an immediate challenge, as technical traders often attach significance to this indicator. In other words, it is likely that a "fade the rallies" approach will prevail now that the market has broken out of a major consolidation area. The projected move indicates a potential drop of 200 points, suggesting that the market may decline to the 0.64 level over time. A more significant decline could ensue if a breakdown occurs below that level, given the prevailing global outlook and the multitude of ongoing events.Traders Should Closely Monitor the MarketIt is crucial to closely monitor developments in China as well, as it substantially impacts the Australian economy. China represents Australia's largest market, and the two economies are deeply interconnected. Additionally, in the coming weeks, the Australian central bank's monetary policy decision could clarify its policies' direction. However, it currently appears that fear is beginning to dominate market sentiment more than any other factor. TL;DR: the Australian dollar experienced a modest rebound during Friday's trading session, following a substantial selloff. Nevertheless, the potential for a "dead cat bounce" scenario exists, and resistance is expected at the 0.66 level, given its previous role as support. Commodity market dynamics and the prevailing global economic uncertainties will heavily influence the Australian dollar's movements. Traders should anticipate a back-and-forth pattern with reactions driven by fear prevailing in the market. Additionally, developments in China and the forthcoming monetary policy decision by the Australian central bank will play significant roles in shaping the Australian dollar's future trajectory.Ready to trade our forex daily analysis and predictions ? Here are the best currency trading platforms australia to choose from.
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