AUD/USD Forecast – Australian Dollar Plunges

AUD/USD Forecast Video for 06.09.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has gotten hammered during the Tuesday session, dropping well below the 0.64 level, reaching to a fresh, new, low. Ultimately, this is a market that I think continues to see a lot of noisy behavior, and I do think that the Australian dollar is going to continue to be a little bit of a punching bag. After all, the market is likely to continue to see more of a “fade the rally” type of attitude, and the RBA holding pat on interest rate hikes makes quite a bit of sense that we would see negativity here as well.

If we break down below the lows of the trading session on Tuesday, then it’s likely that we go much lower, perhaps down to the 0.63 level. On the other hand, if we turn around a rally from here, breaking above the 0.64 level will be an area that could offer a little bit of resistance. After that, then we have the 0.65 level, which has been a massive barrier more than once. Keep in mind that the Australian dollar is highly sensitive to the overall global growth situation, and therefore it will be interesting to see how this plays out. Furthermore, you should keep in mind that the Aussie is highly sensitive to commodity markets, therefore you need to pay attention to those as well.

With the interest rate differential continuing to favor the US, it does make sense that we drop eventually, but that doesn’t necessarily mean that we break down right away. All things being equal, short-term rallies look a bit suspicious, and the first signs of trouble will be sold into. That being said, if we were to turn around and take out the recent micro double top that sits just above the 0.65 level, then we could go look into the 0.66 level, but I think that would take a significant amount of momentum that this market simply does not happen very easily at this point. All things being equal, this is a situation where it looks like we are going to continue to go much lower and with that I think the market is more likely than not going to be noisy but negative.

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