AUD/USD Forecast – Australian Dollar Continues Channeling

AUDUSD Forecast Video for 06.04.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar initially tried to rally during the trading session on Wednesday, showing signs of life as we broke above the 50-Day EMA. That being said, the 0.68 level seems to have caused a bit of resistance, not to mention the fact that the 50-Day EMA is an area where we see a lot of noise. That being said, when we broke down we started to see the same trend line offer support, as it looks like we are forming a bit of a channel to the upside. There certainly seems to be an attempt to break down the US dollar in general, although the Australian dollar of course has taken a little bit of it due to the fact that the Reserve Bank of Australia chose not to raise interest rates at its last meeting. The fact that the Australians have paused the rate hike cycle suggests that perhaps there will be less demand for the currency, but this more or less will move with the US dollar itself.

Underneath, if we were to break down below the 0.66 level, it could open up a potential move to the downside, kicking off a bearish flag. In that scenario, the Aussie could find itself dropping down to the 0.64 level somewhat quickly, as we have seen so much in the way of downward pressure over the last couple of months, at least until we started to form this channel. The question now isn’t so much whether or not we have a channel, but whether or not we have a sustainable downtrend in this is a simple pullback, or if the channel holds and we turn things around?

Ultimately, the Australian dollar is highly sensitive to commodity markets and of course global growth, so that’s something that needs to be paid close attention to as well, with the market more likely than not going to continue to focus on whether or not we have a global growth situation, or if the global economy continues to face headwinds. At this point, one would have to think that it’s a bit of a mixed picture, so the Australian dollar will more likely than not remain very choppy.

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