As the Australian Dollar (AUD) faces pressure from growth concerns in China and softer iron ore prices, the USD has seen a broad rebound, according to OCBC’s FX analyst Christopher Wong.
AUD Vulnerable to Corrective Pullback in Near Term
Technical analysis suggests that the AUD may experience a corrective pullback in the near term, with the pair currently trading at 0.6783 levels. The bullish momentum on the daily chart is fading, and the RSI indicator has eased from near overbought conditions. Traders should exercise caution as a pullback could be imminent.
Key support levels to watch include 0.6730 and 0.6660, while resistance levels are at 0.6830 and 0.6870. Market focus this week will be on the release of 2Q GDP data on Wednesday. A softer-than-expected print could further weigh on the AUD.
Expert Analysis and Market Outlook
Investors should keep a close eye on the developments in China and the performance of the USD, as these factors are likely to drive the short-term movement of the AUD. With potential downside risks looming, it is important to stay informed and be prepared for market volatility.
Overall, the AUD remains vulnerable to external factors and economic data releases, which could lead to increased volatility in the currency markets. Traders and investors should stay vigilant and adapt their strategies accordingly to navigate through these uncertain times.