AUD/USD looks set to extend correction up to 0.9000

FXOpen

AUD/USD is undergoing through a downtrend move since April last year, we still don’t see any long term bullish sign for Aussie dollar against greenback. The pair closed at 0.8774 last week, the lowest level since 2010. Some recovery is being witnessed in Asian session on Monday.

Spot is being traded at 0.8798 at the time of writing where immediate resistance is seen around 0.8834 ahead of 0.8884. I however expect a little deeper correction because the pair has already completed its short-term downside move.

AUD/USD looks set to extend correction up to 0.9000

This can be a likely course of action for AUD/USD in next couple of weeks as per wave analysis and price action signals. The pair should take retracement from 0.9000-0.9020 zone, thus printing a Lower High (LH) on daily chart as shown above.

In long term the pair is headed towards 0.8543 which is 50% fib level of entire move from August 2008 to July 2011. The pair is expected to resume upward movement after finding support at 0.8543 in long term.

On the other hand if we look at macroeconomic scenario, several important fundamental events are due later this week that may have significant impact on AUD/USD. Firstly World Economic Forum (WEF) is going to be held in Davos on Wednesday. Secondly some important economic reports pertaining to Australian economy are also due on Wednesday that include Westpac Consumer Confidence (Jan) and Consumer Price Index (Q4).

In addition investors are seen cautious ahead of very crucial Federal Open Market Committee (FOMC) meeting which is scheduled at the end of this month. US policy makers are very likely to announce yet another tapering in $75 billion monthly bond-buying program known as Quantitative Easing (QE). Fed had announced tapering after FOMC December meeting and minutes of that gathering showed very hawkish mood. Thus back-to-back tapering in January may significantly strengthen the American dollar which wouldn’t be a good sign for AUD/USD.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Commodities and European currencies Test Key Supports EUR/USD Analysis: The Price Today Has Set Its Minimum Since the Beginning of March Market Analysis: GBP/USD Dives While USD/CAD Gains Bullish Pace The US Currency Corrects After Recent Growth USD/JPY Price Analysis: Consolidation ahead of US News

Latest articles

Indices

Although UK-100 Index Is Near All-time Highs, UK Economy Slips into Recession

Technically, a national economic recession is defined as two consecutive quarters of contraction, and yesterday's Office for National Statistics data confirmed that this has happened — UK GDP fell in the third and fourth quarters of 2023 by 0.1% and

Cryptocurrencies

DOGE Price Increases by 170% in Less Than 2 Months

On February 1, 2024, the DOGE/USD rate was = 0.0783. On the last Friday of March, it rose to 0.2150. The rising price means Dogecoin is now the eighth-largest cryptocurrency in the world by market capitalization, overtaking Cardano

Commodities

Market Analysis: Gold Price and Crude Oil Price Gain Bullish Momentum

Gold price started a steady increase above the $2,200 resistance level. Crude oil prices are gaining bullish momentum and might rise toward $85.00.

Important Takeaways for Gold and Oil Prices Analysis Today

· Gold price started a decent increase

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.