AUD/USD Forecast: Continues To Look Toward The Upside

Date

6/12/2023 2:19:30 PM

(MENAFN- Daily Forex)

The aud/usd has displayed notable strength, recovering from an initial decline on Friday.
Currently, the currency aims to surpass the 0.67 level and set its sights on the next target, the 200-Day ema , located around the 0.6750 level.
Beyond that, attention shifts to the significant round number of 0.68, which has been pivotal on multiple occasions. In other words, there will be a lot of people playing close attention to this region going forward.

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Conversely, if the market reverses Friday's gains, a decline toward the 50-Day EMA near the 0.6650 level could ensue. Subsequently, additional support is anticipated at the 0.66 level. Recent surprise rate hikes by the Reserve Bank of Australia have provided further support for the Australian dollar, adding to its bullish momentum. However, with the Federal Reserve's upcoming meeting, heightened volatility is expected in the next few trading sessions. This potential volatility could prompt a slight pullback, although there are currently no indications of exhaustion in the market that warrant selling.

Moreover, the market finds itself sandwiched between the 50-Day EMA and the 200-Day EMA indicators, suggesting a potential period of consolidation and heightened volatility. In the short term, buyers maintain control. Still, it remains to be seen whether traders will begin hedging their positions on Monday or ahead of the weekend due to concerns over the Federal Reserve's potential change in direction, which could have negative implications.Be Cautious

Ultimately, the trajectory of the Australian dollar hinges on risk appetite, which is currently a fragile factor. As a result, cautiousness is advised, and adopting an overly aggressive stance in either direction may be unwarranted at this stage. Nonetheless, the overall momentum still appears tilted to the upside. However, with the central banks meeting next week, be aware that this could change quite quickly, so trade accordingly.

In the end, the Australian dollar has demonstrated strength, rebounding from an initial decline. The currency focuses on surpassing the 0.67 level and targeting the 200-Day EMA and the significant 0.68 level. Potential support lies at the 50-Day EMA and the 0.66 level. The upcoming federal reserve meeting will introduce heightened volatility to the market. Overall, caution is recommended due to the fragile risk appetite, and while momentum favors the upside, maintaining a balanced approach is prudent in the current market environment.

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