AUD/USD Forecast – Australian Dollar Plunges

Christopher Lewis
Published: Oct 2, 2023, 14:23 GMT+00:00

The Australian dollar has fallen significantly during the trading session on Monday, after initially trying to rally.

Australian Dollar bills, FX Empire

In this article:

AUD/USD Forecast Video for 03.10.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar initially tried to rally during the day on Monday, but then sold off quite drastically. The market then broke down below the 0.64 level, an area that’s been important more than once. At this point, we remain stuck in the falling wedge that the market has been so important for so long. If we break down from here, the 0.6350 level offers support, and if we were to break down below there, the market really could fall apart at that point, perhaps reaching down to the 0.62 level.

On the other hand, if we turn around and recapture the 0.64 level, then we could go looking to dig into the shooting star from the Friday session, which showed a massive turnaround after an attempt to break out. Breaking above the top of the shooting star opens up the possibility of a move to the 0.66 level, which of course is an area that previously has been supported. The “market memory” that could come into that area is worth paying close attention to, and it’s not until we break above there that you could consider this a trend change. Furthermore, the 200-Day EMA comes into the picture in that general vicinity, which offers a bit of a ceiling. This of course assumes that the market can get anywhere near that level, which I don’t think it will.

At this point, I still like the idea of fading rallies as they occur, at the first signs of exhaustion. Ultimately, this is a market that is at a significant support level from a longer-term standpoint, so the question now is whether or not we are going to break down. Short-term rallies I think continue to offer the best opportunities to pick a “cheap US dollars”, therefore I like the idea that the short-term rallies are the best opportunities in this pair, at least at the moment. Keep in mind that the Australian dollar is highly sensitive to the Chinese mainland, and of course commodities in general. However, this commodities are highly sensitive the global growth, so it all ties together for a lot of volatility at this point. Short-term smaller positions are probably the best way forward.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

Did you find this article useful?