AUD/USD Forecast – Australian Dollar Plunges

AUD/USD Forecast Video for 24.07.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has plunged lower during the trading session on Friday, reaching down towards the 50-Day MA. By doing so, the market looks as if we are going to continue to grind toward a 0.67 level. The 0.67 level was previous resistance, and therefore it should offer support. If we were to break down below there, then it is likely that the Aussie goes much lower, perhaps reaching down to the crucial 0.66 level.

On the upside, the 0.68 level has been resistance in the past, but it’s worth noting that recently we had reached as high as the 0.69 level, before forming a massive double top. The double top is an indicator of extreme resistance, and a lot of traders will use that as a signal. If you did, then you’ve made money in this pair, as it looks like more of a “risk off” type of scenario is presenting itself. In general, I think we’ve got a situation where we will continue to go lower in general, unless of course there is a huge change in attitude.

I think at this point, you need to look at this through the prism of a market that is trying to figure out what to do with itself, as we are in a huge consolidation zone. The Australians of course recently have surprised the market with tightening, but it’s worth noting that we have almost completely wiped out those 2 massive bullish candlesticks from 2 weeks ago, and it suggests that there’s no real wherewithal in any type of rally. If we were to continue to go lower and break down below the 0.66 level, then we could see this market really fall apart, dropping down to 0.65, and then ultimately my longer-term target is 0.64 over the next several weeks or perhaps months.

Keep in mind that Australia is highly levered to China and of course emerging markets in general as they are a major commodity exporter. The Federal Reserve remains very tight with his monetary policy, and it appears that traders are finally starting to come to grips with the fact that the global economy itself is slowing down, so perhaps the Australian dollar will continue to underperform.

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