AUDUSD analysis: the market remains cautious as AUDUSD continues to decline

The AUDUSD is steadily moving away from its recent highs, with the strength of the US dollar applying consistent downward pressure on the Australian dollar (AUD). More details can be found in our AUDUSD analysis and forecast for 3 October 2024.

AUDUSD forecast: key trading points

• AUDUSD is moving away from the highs
• AUDUSD is pressured by the expensive US dollar and widespread risk aversion
• AUDUSD forecast for 3 October 2024: 0.6845, 0.6835, and 0.6777

Fundamental analysis

On Thursday, AUDUSD fell to 0.6865. The pair is moving further away from its 19-month peak as the US dollar continues to appreciate, driven by stronger-than-expected employment data from the US private sector. This surge has offset the negative effects of the Federal Reserve’s recent dovish tone.

Meanwhile, the AUDUSD faces additional pressure from declining market sentiment driven by the escalation of conflict in the Middle East. However, there is confidence that the Reserve Bank of Australia will delay any interest rate cuts until other major central banks have acted. The likelihood of a rate cut in December is currently 72%, but there is also a chance that monetary policy could remain unchanged until 2025. This suggests a negative short-term AUDUSD forecast for the Australian dollar.

AUDUSD technical analysis

Regarding technical analysis, the H4 chart for the AUDUSD pair shows the first wave of decline targeting 0.6845. The price is consolidating around 0.6895 as of 3 October 2024, with an expected breakout to the downside towards the target level of 0.6845. After this, a correction back to 0.6895 is possible, followed by a new wave of decline to 0.6835. If 0.6835 is breached, this could signal a continuation of the downtrend, with a likely target of 0.6777.

Summary

AUDUSD is moving away from the 19-month high amid deteriorating external sentiment. Technical indicators for today’s AUDUSD rate forecast suggest that the likelihood of the downside wave continuing towards 0.6845, 0.6835 and 0.6777 should be considered.