Certainly. Here’s a rewritten and expanded version of the article “AUDUSD Forecast: 2008 Weakens Toward 200-Day EMA” originally by Christopher Lewis at Menafn.com, with additional insights and information from other reputable forex analysis sources.
—
# AUD/USD Forecast: Market Weakness and Technical Outlook Towards the 200-Day EMA
*Original Author: Christopher Lewis, with additional analysis from other forex market sources.*
## Overview
The AUD/USD currency pair, commonly referred to as the “Aussie dollar,” is showing further signs of weakness, continuing a downward trajectory that has left traders cautious. As the pair trends lower, market participants are closely watching the technical levels and broader economic indicators that could signal either a deeper decline or the possibility of a rebound. The 200-day Exponential Moving Average (EMA) is emerging as a significant technical marker, with price action gradually inching towards this threshold.
## Recent Price Action and Market Sentiment
– The AUD/USD pair has displayed a consistent bearish momentum over recent trading sessions.
– Sellers dominated the market, pushing price action to test new short-term lows.
– Traders are exhibiting caution as the pair approaches major support levels.
### Contributing Factors
There are several fundamental reasons underpinning losses in the Aussie dollar:
1. **Divergence in Central Bank Policies**
– The Reserve Bank of Australia (RBA) remains relatively dovish, with markets perceiving Australian monetary policy as more relaxed compared to the United States.
– In contrast, the Federal Reserve maintains a hawkish stance, reinforcing the attractiveness of the US dollar as interest rate differentials widen.
2. **Risk Sentiment and Global Economic Fears**
– Global risk aversion continues to affect high beta currencies like the Australian dollar.
– Economic data from China, Australia’s top trading partner, remains under scrutiny, with slower Chinese growth raising concerns for Australian exports.
– The ‘Aussie’ is often seen as a barometer for global risk appetite due to its strong exposure to commodity markets.
3. **Recent Economic Releases**
– Australian macroeconomic data has not provided the positive surprises needed to lift the currency.
– Disappointing inflation readings and soft labor market data have weighed on the currency.
## Technical Analysis: AUD/USD Approaches the 200-Day EMA
Technical traders are keenly aware of important moving averages, with the 200-day EMA acting as a line of demarcation between long-term bullish and bearish bias.
### Key Technical Observations
– **Price proximity to 200-Day EMA**: The pair has gradually declined toward the 200-day EMA, a major technical support area watched by both institutional and retail traders.
– **Support and Resistance Areas**:
– Immediate support is found around the 0.6600 level.
– Additional support is expected near the 0.6550 area, which previously acted as resistance and could now turn into support.
– Resistance is located around the
Read more on AUD/USD trading.