AUD/USD Forecast: Attempts To Rally But Gives Up Gains Early
Date
11/14/2023 2:16:36 PM
(MENAFN- Daily Forex)
The AUD/USD made an initial attempt to rally during the Monday trading session but encountered substantial resistance just above, leading to a retracement of gains. It's worth examining the chart, which suggests that a significant amount of price volatility can be expected in the vicinity of the 0.64 level. This particular zone has garnered significant market attention, essentially acting as the midpoint between the substantial support at 0.63 and the significant resistance at 0.65. All things being equal, I just don't see how we break out of this range anytime soon, as the market will continue to look at a myriad of potential issues out there.
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In a broader context, the market is currently in a consolidation phase, and it is entirely reasonable to anticipate heightened price volatility within this range. At this juncture, the market appears to be oriented towards short-term trading dynamics. Consequently, it is advisable not to become overly committed to any specific trading position. It is worth noting that, given the Federal Reserve's steadfast adherence to a tight monetary policy, the path of least resistance for this market may lean towards a downside move. In the event that the lower boundary of the range is breached, this could potentially open the door to a more pronounced decline, possibly targeting the 0.60 level. In that scenario, we would probably see the US dollar strengthened against most currencies, not just this one Cautious
A scenario to watch for is if the market manages to break above the 50-Day Exponential Moving Average. In such an instance, there could be a short-term uptick towards the 0.65 level. However, it is important to acknowledge that surpassing this level is likely to prove challenging, and the market is more inclined to resist such an attempt.
A successful breakout above the 0.65 level would be a notably bullish development, suggesting a broader shift in the trajectory of the US dollar. However, it is essential to remain cautious, as this scenario seems less probable, especially given the Federal Reserve's resolute stance and the ongoing geopolitical concerns. In environments characterized by geopolitical uncertainties, the US dollar typically maintains its relative strength, which could exert further pressure on this market. With this in mind, a prudent strategy may involve capitalizing on market rallies as they materialize.
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