Australian Dollar Forecast: AUD/USD, AUD/CAD, AUD/JPY

AUD/USD suffered a critical break beneath support at 0.6678 last week as risk aversion spiked on coronavirus fears. In the days since the Australian Dollar has continued significantly lower without notable support to buoy price. Despite its extended decline, the pair still lacks a readily available support zone and the driving fundamental concern behind the widespread risk aversion remains uncontrolled.

AUD/USD PRICE CHART: DAILY TIME FRAME (NOVEMBER 2018 – FEBRUARY 2020)

(Click on image to enlarge)

audusd daily price chart

Further still, IG Client Sentiment Data reveals retail traders are overwhelmingly long – expressing confidence the selloff is complete – a revelation we typically view as a sign AUD/USD remains vulnerable. With the fundamental and technical forces leaning lower, it seems possible the pair may venture lower and could eventually test support around 0.6328 which dates to 2009.

AUD/CAD PRICE FORECAST

Similarly, AUD/CAD has experienced a string of sizable declines despite weakness in the Canadian Dollar elsewhere. As a result, the pair trades at its lowest level since June 2010 and may lack noteworthy support until the 0.8655 area – originating from the 38.2% Fibonacci retracement of the pair’s all-time high and low.

AUD/CAD PRICE CHART: DAILY TIME FRAME (OCTOBER 2016 – FEBRUARY 2020)

(Click on image to enlarge)

audcad daily price chart

Chart created with TradingView

Either way, supportive zones are difficult to outline at the current spot price and the damage dealt to the Australian economy from the coronavirus may continue to undermine the Aussie. Should bullishness emerge, however, an early barrier to the recovery will likely reside around 0.89.

AUD/JPY PRICE FORECAST

Interestingly, the sentiment-linked AUD/JPY has not traveled to extremes like AUD/USD and AUD/JPY have. That is not to say the pair has been invulnerable to losses - as it fell significantly – but the pair remains a comfortable distance from decade lows or the similarly historic levels one might expect given price action elsewhere and the risk relationship between the two currencies.

1 2
View single page >> |

Disclaimer:  DailyFX, the free news and research website from IG, is one of the world's leading sources for news and analysis ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.