**AUD/USD Forecast: 2008 Weakens Toward 200-Day EMA**
*Based in part on the analysis by Christopher Lewis, MENAFN.*
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## Introduction
The Australian dollar (AUD) and the United States dollar (USD) are among the most widely traded currency pairs in the world. Known for its sensitivity to risk sentiment and China’s economic data, the AUD/USD exchange rate often serves as a proxy for global risk appetite and commodities demand. Recently, market action has seen the AUD weaken toward its 200-day Exponential Moving Average (EMA), reflecting changing investor sentiment and shifting technical signals.
This article provides an in-depth analysis of the recent movement in the AUD/USD pair, examining technical setups, macroeconomic drivers, and implications for traders. Additional information from reputable forex and economic analysis sites supplements the original insights provided by Christopher Lewis at MENAFN.
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## Recent Price Action Overview
Over the past few weeks, the AUD/USD axis has experienced notable volatility, driven by external data releases, shifting central bank policies, and fluctuating risk appetite. Key characteristics of recent trading include:
– Persistent downward pressure on the AUD due to a combination of global risk-off sentiment and weaker Chinese growth signals
– The US dollar strengthening, primarily on the back of expectations of prolonged higher interest rates by the Federal Reserve
– Technical resistance near the 0.6700 level, with increasing attraction toward the 200-day EMA as a dynamic support area
### 200-Day EMA as a Focal Point
The 200-day EMA is widely considered a critical indicator for longer-term trends. When the price holds above this line, bullish sentiment persists; conversely, a decline below often triggers further selling and a potential shift to a bearish trend.
Currently, AUD/USD is gravitating toward this crucial area, and price action suggests traders are weighing whether to defend this level or capitulate to further downside.
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## Technical Analysis
Let’s break down the technical signals evident on the AUD/USD daily chart:
### Key Resistance and Support Levels
1. **Resistance**
– **0.6700 Region**: Major psychological and technical resistance. Price action has failed to sustain momentum above this level, encountering sellers whenever approached.
– **0.6750 – 0.6780 Zone**: If bulls manage to break higher, this consolidation region from earlier in the quarter represents the next test.
2. **Support**
– **0.6600 Level**: A round-number support, where the market recently found demand.
– **200-Day EMA (Around 0.6560 – 0.6580)**: The dynamic technical support attracting traders’ attention. Historically, this has acted as a launching pad for reversals, but a breach could precipitate further downside.
### Candlestick Patterns and Momentum
– Recent daily candles show increased wicks on the top side, highlighting failed bullish attempts and intra-day reversals
– Short-term momentum indicators (RSI, MAC
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