AUD/USD Forecast – Australian Dollar Drops

AUD/USD Forecast Video for 23.11.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar initially tried to rally a bit during the trading session on Wednesday, testing the 200-Day EMA, just as it had done during the Tuesday session. We have since fallen, so it does suggest that perhaps we are going to go back down to the previous support level in the form of the 0.65 level. This was previous resistance as well, and of course it is a large, round, psychologically significant figure. Anything below there could show the Aussie losing substring, and it is worth noting that the US dollar has strengthened across the board.

On the other hand, if we turn around and take out the 0.66 level to the upside, that would allow the Australian dollar to go much higher, perhaps reaching toward a 0.69 level over the longer term. This would be based on the idea that the Federal Reserve is done raising rates, and therefore traders might get a little bit over exuberant. However, it’s probably worth noting that it has been very choppy on the way up, so I think in the short term we are going to continue to see a lot of noise.

In general, this is a market that I think could consolidate in this area as we try to sort out what just happened, and whether or not it is something that will “stick.” After all, the market continues to see a lot of volatility and noisy behavior, and therefore you need to understand that position sizing will be crucial. Looking at the charts, I could see a region between 0.65 on the bottom and 0.66 on the top offering a short-term trading environment, so you will have to keep an eye on that as well.

I would keep my position sizing reasonable, just due to the fact that things could get rather volatile as we head toward the holidays, which of course takes a lot of liquidity out of the markets. Furthermore, Federal Reserve chatter will continue to be a major issue as well. The US dollar will of course be used as a safety currency, so you have to be very cautious with macroeconomic and geopolitical events at the same time.

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