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AUD/USD Forecast: May Correct Higher Before Resuming Its Decline

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AUD/USD Forecast: May Correct Higher Before Resuming Its Decline

AUD/USD Current Price: 0.5982

  • RBA confirmed the rate cut came as a result of the coronavirus effects on the economy.
  • Wall Street recovered, but the Aussie was unable to take advantage of it.
  • AUD/USD may correct higher before resuming its decline.

The AUD/USD pair has remained under selling pressure, falling to a fresh multi-year low of 0.5958, finishing the day not far above the level. The RBA released the Minutes of its latest Monetary Policy Meeting at the beginning of the day, which confirmed that the decision to cut the cash rate to 0.5% was driven by policymakers concerns about the impact of the coronavirus outbreak on the economy. The dollar’s self-strength kept the pair falling despite an improved market mood led to a positive close in US indexes. Australia will release this Wednesday the February Westpac Leading Index, previously at 0.05%.

AUD/USD Short-Term Technical Outlook

The AUD/USD pair is trading below the 0.6000 level extremely oversold in almost all time-frame under study, which lifts odds of an upward corrective movement. Nevertheless, the 4-hour chart shows that the risk is skewed to the downside, as technical indicators barely stalled their declines within extreme levels, while the pair keeps developing below a firmly bearish 20 SMA. The pair may well consolidate and post modest gains during the upcoming sessions, yet sellers will likely take their chances at higher levels.

Image Sourced from Pixabay

 

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