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After breaking through the downward wedge, the Australian dollar/USD hit its nearly five-year low, and oversold signals followed
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Hello everyone, today XM Forex will bring you "[XM Forex Decision Analysis]: After breaking through the downward wedge, the Australian dollar/USD hit a low in the past five years, and the oversold signal follows." Hope it will be helpful to you! The original content is as follows:
During the European session on Wednesday (April 9), the Australian dollar/USD exchange rate ended its three consecutive days of decline and is currently consolidating around 0.6000, supported by U.S. President Trump's remarks signaling his willingness to negotiate with his trading partners. Despite the recent high market volatility, the Australian dollar still forms a potential support signal on the daily chart, triggering discussions on the possibility of a short-term rebound.
State Analysis
Global trade tensions remain the main factor affecting the Australian dollar/USD exchange rate. The U.S. Customs and Border Protection announced Tuesday that it was preparing to begin leveraging country-specific tariffs on 86 trading partners. While Trump said he was not considering suspending his extensive tariff plan, he was open to the negotiations, which brought a glimmer of hope to the market.
Australia's economic outlook remains fragile, with both business and consumer confidence sluggish. Australia's consumer confidence index fell 6% in April, the first decline since January this year. The business confidence index fell to -3 in March, the lowest level since November last year. These weak data reinforce expectations that the RBA's stance will be more dovish, with the market now expecting a rate cut of up to 100 basis points this year, with further rate cuts starting in May and in July and August.
Chicago Fed Chairman Goulsby stressed the importance of a xmserving.comprehensive assessment of economic data before deciding future monetary policy steps. According to the CMEFedWatch tool, traders are increasingly betting on a rate cut in May xmserving.com25 basis points, howeverThe market generally still regards the July rate cut as a more likely scenario, with the total rate cut expected to exceed 100 basis points by the end of the year.
The US dollar index (DXY) fell below 102.50, but the downside seems limited due to the rising yield on the US 10-year Treasury bonds. Rising yields reflect higher demand for returns in the context of increased uncertainty arising from escalating global trade tensions.
Technical analysts' interpretation:
120-minute chart shows that the Australian dollar/USD exchange rate has formed a significant downward trend from the high point of 0.6388, creating a series of lower high points and lower low points. The exchange rate has fallen below 0.6060 key support, suggesting that short-term downward pressure continues. From the perspective of moving average system, MA55 (0.6112) is significantly tilted downward, and the exchange rate is trading below the main moving average, indicating that shorts dominate the market. The MACD indicator runs below the zero axis, and the distance between the DIFF line (-0.0027) and the DEA line (-0.0032) is widening, but it is worth noting that the MACD bar chart has begun to shorten, which may imply that the action energy is weakened. The RSI indicator hovers at the 46.0550 level and has not yet reached the oversold area, indicating that there is still room for further downward trend.
On the daily chart, the Australian dollar/USD exchange rate formed a significant decline wedge pattern. The exchange rate recently rebounded from the lower wedge boundary, but then fell below the key support level of 0.6000, reaching a low of 0.5913. Both MA55 (0.6275) and MA200 (0.6489) are tilted downward, enhancing the establishment of the downward trend. The RSI indicator has dropped to the oversold area of 30.5147, which is usually a potential rebound signal. However, the MACD indicator shows that the dead cross pattern deepens, the distance between the DIFF line (-0.0070) and the DEA line (-0.0032) further expands, and the bar chart appears green and the volume increases, indicating that the downward pressure still exists. The CCI indicator fell to the extreme oversold area -146.2086, and this extreme reading often triggers a short-term technical rebound.
Future Outlook
Short-term Outlook: The Australian dollar/USD exchange rate is currently around 0.5950-0.6000 in key support areas. Both RSI and CCI indicators show oversold status, which may trigger a technical rebound. If there is a rebound, the primary resistance is at 0.6060 (the previous support resistance), and the further resistance is at 0.6090 level. However, given the fundamental pressure and the fact that the technical side has fallen below important support levels, the rebound may be a rebound in the bear market, rather than a trend reversal. In the short term, the exchange rate may oscillate and consolidate within the range of 0.5900-0.6100, waiting for the next clear directional catalyst.
Medium- and long-term outlook: AUD/USD is still in a downward trend, with dead cross signals and wedge breakouts on the daily chart suggesting that the medium-term outlook is biased towards bearish. Global trade tensions and weak Australian economic data may continue to put pressure on the Australian dollar. Unless the exchange rate can re-establish the 0.6200 level and stabilize, the downside risk will be maintainedContinued. If global risk sentiment worsens further, the exchange rate may test long-term support in the 0.5800-0.5850 region. And if trade tensions unravel, it may provide breathing room for the Australian dollar, but breaking through the resistance band of the 0.6250-0.6300 area will be a necessary condition for confirming a true bull reversal.
The market is paying attention to the upcoming U.S. inflation data this week, which will have a significant impact on the Fed's expectations for a rate cut in the xmserving.coming months. In addition, the minutes of the Federal Reserve meeting to be released in the early hours of Thursday may provide more policy clues to the market, which will affect the exchange rate trend.
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