The Australian dollar has seen a significant rally this week, bringing it back to where it started at the beginning of the year. Despite the strong performance, there are challenges ahead that may make further gains difficult.
Geopolitical risks and the strength of the US dollar continue to impact the market, making it noisy and unpredictable. The 0.6650 level is seen as a major resistance barrier, with the possibility of a move towards the 200 week EMA at 0.69 if broken. On the downside, the 0.6450 level provides strong support, but a break below could see the Australian dollar drop to 0.63.
Volatility and choppiness are expected in the market, with uncertainty making it hard to be bullish on the Australian dollar. The US dollar’s safe-haven appeal adds to the challenges for the Aussie. Some analysts suggest a triangle pattern forming on longer-term charts, though its effectiveness remains uncertain.
Keep an eye on economic events with our economic calendar for further insights.