In the dynamic world of foreign exchange, the Australian Dollar (AUD) against the US Dollar (USD) is set to experience a period of range – bound trading, according to analysts at UOB Group. Instead of a continued downward spiral, the AUD/USD pair is likely to fluctuate within the 0.5945 – 0.6110 range. However, looking further ahead, the door remains open for additional declines.
24 – Hour Outlook: Recovery Signs After Sharp Plunge
Last Friday witnessed a dramatic plunge in the value of the AUD against the USD. This downward trend continued on Monday, albeit at a more moderate pace. The AUD closed 0.94% lower at 0.5988. But analysts believe that the sharp drop might have been excessive. There are early indications of a slowdown in the downward momentum. As a result, the AUD is expected to trade between 0.5945 and 0.6110 on Tuesday, rather than extending its losses.
1 – 3 Weeks Outlook: Uncertainty Lingers Amid Oversold Conditions
In an update on April 5th, when the AUD/USD was trading at 0.6330, UOB Group’s FX analysts Quek Ser Leang and Peter Chia had stated that for the AUD to see further gains, it needed to break and sustain above the crucial resistance level of 0.6410. Unfortunately, not only did the AUD fail to breach this level, but it also experienced a significant drop over the past two days.
Despite the possibility of further declines, the current deeply oversold conditions of the AUD make it uncertain whether it can reach the next support level at 0.5870. Analysts suggest that a breach of the 0.6185 level would be a key signal indicating that the current downward pressure on the AUD is starting to ease. Until then, traders and investors should brace for continued volatility in the AUD/USD pair over the coming weeks.
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