AUD/USD Forecast – Australian Dollar Loses Momentum

AUD/USD Forecast Video for 25.10.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar initially rallied on Tuesday, but continues to lose momentum every time it tries to gain against the greenback. Ultimately, this is a market that I think will continue to see a lot of volatility, and the 0.64 level above continues to act as a bit of the ceiling. At this point, it is showing more and more strength as resistance, so it could be the top of the market at the moment. Furthermore, we have the 50-Day EMA coming into the picture, which also is a technical indicator that a lot of people will use as dynamic resistance.

The Aussie dollar has a lot of things to worry about right now, as it is considered to be a “risk on currency”, and the world seemingly is propelling itself toward bigger wars. With this being the case, it makes a certain amount of sense that the US dollar continues to be a bit of a safety currency, and of course the interest rates coming out of the United States help that currency strengthen as well.

I think at this point, we have a scenario where the market will see a lot of volatility, but it continues to be a “fade the rally” type of situation, with the obvious support down at the 0.6275 level causing a lot of headaches. If we could break down below there, then the market is likely to go much lower but at this point I think we’ve got a situation where you have to look at this market through short-term charts more than anything else, as it continues to look very much like a range bound but negative scenario.

If we were to turn around and break above the 0.64 level, that would be a major turnaround and at that point could open up another 100 pips to the upside rather quickly. I don’t see that happening, but it is something that you need to keep in mind for the other side of the equation if we do in fact see a sudden turnaround in tension geopolitically, inflation start to die off, something like that happening as unlikely as it seems to be at the moment. At this point, choppiness is probably the only thing you can count on.

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