AUD/USD Forecast – Australian Dollar Pulls Back to Open the Week

AUD/USD Forecast Video for 11.07.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar initially tried to rally during the trading session on Monday, but the 50-Day EMA has offered a little bit of resistance. Furthermore, we had the Australian dollar react to the Chinese economic numbers overnight disappointing, as it looks like there are concerns about deflation in the Chinese economy. If that’s going to be the case, then it’s likely that we would see the longer-term correlation between Australia and China play out.

It’s worth noting that the 0.66 level underneath offers a bit of support, and if we were to break down below there, then it’s likely that we could drop down to the 0.65 level, an area we have bounced from previously. Breaking down below there opens up the possibility of a move down to the 0.64 level, which is the “measured move” of the breakout of the rectangle that we had been in previously. However, keep in mind that we had it broken down to the lower levels, only to turn out a rip through that rectangle and break to the upside, and then fall back to where we are now. In other words, the volatility continues to be exacerbated.

On the other hand, if we were to turn around and break above the top of the past couple of candlesticks, it opens up the possibility of a move toward the 200-Day EMA, near the 0.6750 level. After that, then we could go looking to the 0.68 level. Keep in mind that the Australian dollar is highly sensitive to not only China, but the commodity markets in general, and of course risk appetite.

All things being equal, it looks like it’s more of a “fade the rally” type of market, and therefore I think we continue to see sellers in general, but we will get the occasional reactionary bounce from the 0.66 level. In general, I think we are more or less in a range bound type of market with more downward pressure than not, so that’s essentially how I am approaching this market. The markets will continue to be noisy, but ultimately I do think that the US dollar is starting to pick up some steam.

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