The Australian dollar saw a slight decline in early trading on Tuesday, struggling to overcome the 0.71 mark.
Australian dollar/US dollar
Nonetheless, I wouldn’t consider shorting it against the US dollar. There’s a strong possibility that the Reserve Bank of Australia may need to raise interest rates. In this current scenario, it seems that any rise above the 0.71 level presents a potential buying opportunity. If that occurs, I wouldn’t be surprised if the AUD climbs toward 0.73.
Possibility of higher goals
That said, I also understand that this level is tough to breach, and there’s noticeable hesitance in the market. In that case, it’s worth considering a bargain buy. However, if it dips below 0.69, that would be quite bearish.
Given the current climate, we expect the US dollar to strengthen against most currencies. While it might be tempting to short the Australian dollar, it could be more advantageous to buy the dollar against currencies like the yen or consider shorting the euro in relation to the dollar.
This pairing stands out, making it particularly captivating. One possibility highlighted here is that if Australia does rebound, even while the dollar gains against the euro or pound, shorting the euro against the Australian dollar might be an option. There’s a lot happening globally, but I think the Australian dollar could emerge as a significant beneficiary.
Interested in trading our Australian dollar/US dollar forex forecast? Below is a list of some top Forex brokers in Australia that I’m looking into.
Christopher Lewis has over two decades of experience in foreign exchange trading. He has contributed regularly to various financial publications, including FX Empire and Investing.com. Chris employs technical analysis to pinpoint trades, enjoying a long-term trading approach, often spanning days or weeks.
