AUD/USD Forecast – Australian Dollar Runs Into Significant Resistance

AUD/USD Forecast Video for 19.10.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied a bit during the trading session on Wednesday, to reach toward the 0.64 level. The 0.64 level is an area that has been important multiple times, so pulling back from there is not a huge surprise. Furthermore, we also have the 50-Day EMA reaching toward that level, which should offer quite a bit of resistance in and of itself as well. Also, we have the downtrend line from the previous wedge that had been forming, and one would assume that comes into the picture as well.

All things being equal, this is a situation where we continue to see plenty of sellers every time we rally, and I think that probably continues to be the case as the market is going to worry about geopolitical concerns, which of course favors the US dollar and works against the Australian dollar as it is a commodity currency, and a currency that relies on global trade to be flowing easily. Beyond that, we also have to worry about the possibility of a global recession, which of course will drive down demand for hard commodities coming out of Australia.

The interest rates in the United States continue to climb on the short end of the yield curve, and that makes the US dollar a bit more attractive as well. With all of this jumping on top of each other, it should continue to keep the Australian dollar muted at best, but if we were to turn around a break above the 0.65 level, then you would have to start to have a conversation about the possibility of recovery.

After all, we are at extreme lows, and it would make it a value trade if we do in fact find a fundamental reason to go higher. In the meantime, I think you continue to look at this through the prism of short-term charts, and just simply take advantage of “cheap US dollars” every time they appear. If we were to break down below the recent double bottom, that opens up a move down to the 0.62 level, possibly down to the 0.60 level over the longer term.

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