AUD/USD Forecast – Australian Dollar Blasts Through Resistance

AUD/USD Forecast Video for 14.07.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied significantly during the trading session on Thursday, blasting through the 0.68 level. This is an area that previously was resistance, and the fact that we have shot through there suggests that the US dollar weakness could continue. This was exacerbated by the CPI numbers on Wednesday coming out lighter than anticipated and suggesting that perhaps the market is going to see slowing inflation. That being said, the market is likely to continue to be very sensitive as traders around the world worry about the central banks and what they are going to be doing. The idea that the Federal Reserve may slow down has certainly weighed upon the US dollar, so this will be interesting.

Just above, the 0.69 level is an area where we have seen a bit of resistance after the previous shot higher. If we can break above there, then the market is likely to open up the possibility of a move to the 0.70 level. That being said, we are a little overextended at this point, so a pullback could be coming. Nonetheless, it is a market that has been wildly volatile, due to the fact that the Aussie is not only sensitive to the global growth situation, but it is also very sensitive to commodity markets as well.

At this point, the US dollar is probably the biggest mover of this market, as we are seeing everybody focusing on the Federal Reserve’s next move, even though everybody already seems to know that there are a couple of rate hikes ahead. The question is whether or not traders can be convinced that the Federal Reserve will stay “higher for longer.” Furthermore, the Reserve Bank of Australia has been relatively aggressive as well, so that is another factor in this market.

The last couple of candlesticks have been very impulsive, and therefore one would have to assume that there’s a little bit of momentum, but a short-term pullback is probably necessary. Whether or not we can continue remains to be seen, but if we were to clear that 0.69 level, then we could start to see momentum really start to pick up.

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