Australian Dollar Forecast:
- AUD/USD[1] teeters on support after continued Aussie weakness threatens to send the pair lower
- Sentiment-linked AUD/JPY[2] moved off support after early pressure but remains endangered
- AUD/NZD[3] may be a unique opportunity for AUD[4] strength, but concerns linger
AUD/USD Price Forecast
The Australian Dollar slipped lower against most major pairs on Tuesday after coronavirus concerns emerged following Apple’s earnings revision.[5]While there is data to suggest the Australian Dollar and ASX 200[6] can weather the recent hit to economic growth[7], fading risk appetite elsewhere – like the Dow Jones[8] and Nasdaq[9] – could hint a broader decline for risk assets is brewing. Similarly, a bullish break higher[10] for gold[11] could indicate a growing demand for safety.
AUD/USD Price Chart: Daily Time Frame (November 2018 – February 2020)
Nevertheless, the US equity market has shown an insatiable appetite for gains[12] despite a flurry of headwinds so prolonged risk aversion is far from certain, but continued tests of support around the 0.6678 level highlight persistent bearish interest.
Further, IG Client Sentiment Data reveals an overwhelming majority of retail traders are bullish on the pair which could suggest further losses. To that end, a break beneath the 0.6678 level would effectively open the door lower and may allow the pair to test 0.6560.
AUD/JPY Price Forecast
Looking to AUD/JPY[13], two-fold resistance at the 74 level will aim to keep the Australian Dollar contained in conjunction with damaged risk sentiment.[14] On the other hand, a descending trendline that coincides with various swing-highs dating back to December 2018 may provide a sliver
