AUD/USD Forecast – Australian Dollar Bounces After Jobs Report

AUD/USD Forecast Video for 07.08.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied a bit during the course of the trading session on Friday, breaking above the 0.66 level. The 0.66 level has been significant support previously, but at this point in time I think the “market memory” should come into play, somewhere between here and the 50-Day EMA. This is a sizable candlestick for the day, but is also a knee-jerk reaction to the jobs number coming out lower than anticipated in America.

At the end of the day, the Federal Reserve is going to continue to be very tight with its monetary policy, but we have also seen the RBA choose not to raise interest rates when people expected them to. Because of this, it’s very likely that we continue to see the market shows signs of hesitation to the upside, and therefore I don’t really like the idea of going long in this market. That being said, if we were to break above the 50-Day EMA, it could be a sign that we are going higher, but I don’t necessarily think that’s going to happen.

Keep in mind that the Australian dollar is highly sensitive to commodities, which of course is a market that is very volatile. Furthermore, we also get a reaction in the Aussie to the overall growth situation globally, though right now I think the last 24 hours have been more or less about the potential Federal Reserve and where it’s going with its monetary policy.

It’s obvious that traders do not believe that the Fed will continue to be tight with its monetary policy as long as they say, but at the same time we continue to see a lot of comments coming out of the Federal Reserve that they are going to stay tighter for longer. In other words, it comes down to knowing if and when the market believes the Federal Reserve. All things being equal, I’m looking for signs of exhaustion that I can start shorting, perhaps sending the Aussie back down toward the 0.65 level. Expect a lot of volatility.

For a look at all of today’s economic events, check out our economic calendar.