AUD/USD Forecast – Australian Dollar Gets Hammered

AUD/USD Forecast Video for 02.08.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has been hammered during the trading session on Tuesday, as the RBA decided to cut interest rates overnight, which was a bit of a shock. At this point, it looks like the 0.66 level will be threatened, an area that has been supported for some time. At this point, I think you’ve got a situation where you have to look at this through the prism of whether or not we are going to see buyers come back into the market to support this area, or if we are finally going to break through it.

I anticipate that we probably do breakthrough eventually, but the question now is whether or not we do it right away, or if a stronger than anticipated jobs number on Friday might be the catalyst. Keep in mind that the Non-Farm Payroll number does of course have a major influence on where we go next, so pay close attention to that. All things being equal, I think it’s only a matter of time before the Aussie gets hammered, especially as we have to pay close attention to not only interest rate differentials changing, but the fact that it is so sensitive to the global growth situation, which of course is a bit of a money picture.

Commodities of course are a big driver of the Aussie, and at this point it’s going to be a situation where we will eventually find some type of reason to get involved. All things being equal, this is a situation where we will see quite a bit of volatility, therefore I think you need to be very cautious to your position size, and whether or not you get very aggressive. In general, the size of this candlestick is very negative, and therefore I think we have to worry about the momentum picking up. All things being equal, I do think that the death of the US dollar has been prematurely announced, and I think you are seeing this in the Aussie.

In general, I think you see a lot of choppy behavior, but I still think it’s easier to short this market on signs of exhaustion after a short term rally, but keep in mind that this is a market that will be very jittery.

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