AUD/USD Forecast – Australian Dollar Pulls Back

AUD/USD Forecast Video for 25.08.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has fallen rather hard during the session on Thursday, as it looks like traders are starting to pay close attention to the possibility of hawkish behavior coming out of the Jackson Hole Symposium. All things being equal, I think a lot of people are trying to figure out whether or not Federal Reserve policy will continue to be tight, (yes, they are going to) and whether or not the Federal Reserve is going to try to talk down expectations of any type of easing of its monetary policy. That being said, I think it probably takes quite a bit to make that happen, so I anticipate that we will see a continuation of the previous behavior that the market has seen.

Underneath, the 0.64 level is an area of support, as we have bounced from it and of course this is an area that has previously been important on historical charts as well. Above, we have the 0.65 level, which of course is a large, round, psychologically significant figure that a lot of people will pay close attention to, and an area where sellers have jumped back in. Clearing that opens up the possibility of a move to the 50-Day EMA, near the 0.66 level, offering a major barrier also.

I think that by the time we get through the Friday session, we may get some type of clarity, and therefore I think that once that happens we could have a big move. If that ends up being the case, then I think we could have a nice trade set up. Between now and then it’s very difficult to get overly excited about trading this market, as we are simply seeing a lot of position squaring ahead of the main event. Ultimately, once we break out of this range that we are in over the last couple of days, I think you will probably see a significant amount of follow-through that can be held on to. Keep in mind that the Australian dollar is highly sensitive to the commodities markets, and of course the idea of global growth, as Australia is the main exporter of hard commodities to China.

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