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The AUD/USD pair faced sustained downward pressure last Friday, closing at 0.6350, its lowest level since August 2024. This marks an important area for traders, as the pair continues its bearish trend, with sellers in control.
Technical Analysis
On the H4 chart, the AUD/USD pair remains firmly in a downtrend, marked by a series of lower lows and lower highs. Both the 50 EMA and 200 EMA are acting as dynamic resistance, limiting any potential upside movements.
- Support Levels: The immediate downside target is the 0.6260 level, which aligns with the low from September 2023. A break below this level could signal further bearish movement.
- Resistance Levels: If the price manages to rise above 0.6390 and hold steady, it could test the 0.6430 level before sellers regain control and push the price lower.
Fundamental Factors Influencing AUD/USD
Several macroeconomic factors are contributing to the current bearish outlook for AUD/USD:
- US Dollar Strength: The US Dollar continues to strengthen due to hawkish Federal Reserve policies and strong US economic data, putting pressure on the Australian Dollar.
- China’s Economic Slowdown: As Australia’s largest trading partner, China’s slower-than-expected recovery is negatively impacting the Australian Dollar. Weak demand for key Australian exports like iron ore and coal is adding to the AUD’s struggles.
- Reserve Bank of Australia (RBA) Policy: The RBA has maintained a more dovish stance compared to the Federal Reserve, further widening the policy gap and weakening the AUD.
- Risk Sentiment: The Australian Dollar is sensitive to global risk sentiment. Any rise in geopolitical tensions or negative global economic developments could further weigh on the AUD.
Forecast for 16 December 2024
In the short term, the AUD/USD pair is expected to remain under bearish pressure. If the price breaks below the 0.6350 level, it is likely to continue toward the 0.6260 support, last seen in September 2023.
However, if buyers manage to push the price above 0.6390 and maintain stability, a short-term rebound toward 0.6430 could occur before sellers re-enter the market.
Key Levels to Watch
- Support: 0.6350, 0.6260
- Resistance: 0.6390, 0.6430
Conclusion
The AUD/USD pair remains firmly in a downtrend, with bearish momentum expected to continue in the near term. Traders should closely monitor the 0.6350 level for potential further declines, while resistance at 0.6390 will be a key level to watch for any recovery attempts.
