AUD/USD Forecast: Hovers Near 0.7050 Range Midpoint

The Aussie dollar has been a bit choppy during the trading session here on Tuesday as we continue to hover around the 0.7050 level.

AUD/USD

The Aussie dollar has been a bit choppy during the trading session here on Tuesday as we continue to hover around the 0.7050 level. This is an area that's been important a couple of times in the past, and we find ourselves just kind of hanging out here.

The interest rates in America have drifted a little bit lower during the day, and we've seen the Aussie rally as a consequence. Quite frankly, this is a pair that I think stuck in neutral, and I think a lot of markets are right now. With everything that's going on in the Middle East, it's hard to get aggressive and fight what could be a massive turnaround in interest rates just out of the blue.

Range-Bound Conditions and Key Levels

The 50-day EMA underneath should offer some support with the 0.70 level being right there as well. To the upside, the 0.7150 level is a major target. We'll see if we can get there, but this is a market that I think really doesn't know what to do. It's longer-term range-bound. We're basically in the middle of it.

I like the idea of buying dips, I suppose, but not with big positions. This is one of those markets that you just nibble at for a little bit of gains here and there, maybe 20 to 30 pips at a time. It's just not a big mover right now.

Interest rate differential, well, it's not huge, but it does actually favor the US dollar a little bit. All things being equal, this is a market that I think may be influenced by headlines from outside of Australia more than anything else. Remember, the Aussie economy is highly leveraged to the Chinese economy, so be watching those economic numbers as well.