AUD/USD Forecast – Australian Dollar Rallies in Thin Liquidity

AUD/USD Forecast Video for 05.09.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied a bit during the trading session on Monday, as traders continue to pay close attention to the volatility and the choppiness in this area. All things being equal, this is a market that continues to look at the 0.65 level above as resistance. I think that continues to be the case, but you should keep in mind that Monday is also Labor Day in the United States, so liquidity could have been a major issue. If we break above the 0.65 level, then it’s likely that we could go looking to the 50-Day EMA, perhaps even the 0.66 level after that.

Now that we are trying to rally, it looks to me as if there is probably a little bit of hesitation at the end of the session, and it’s worth noting that the last several days we have seen the same pattern repeat, where the Aussie dollar rallies, only to get sold off again. Underneath, I think the 0.64 level is an area of massive support. If we break down below there, then the market is likely to go much lower, perhaps opening up and move down to the 0.6250 level.

In general, this is a market that is going to continue to run based on the idea of what happens with global growth. After all, the Australian economy is highly levered to the Asian market, and of course the commodity markets. With this being the case, the market is going to be paying close attention to the idea of how things are playing out globally, and it’s probably worth noting that the Reserve Bank of Australia has a meeting soon, although most traders don’t expect much in the way of a change. That being said, if the RBA does shock traders, it could be a big turnaround. Ultimately, this is a situation where I think we continue to look at the overall attitude of risk appetite, and therefore if there is a run to safety, that will probably crush the Aussie, especially as the US dollar is considered to be a safe haven asset. Ultimately, I think this is a market that remains very noisy, but we need to pay close attention to this overall attitude.

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