AUD/USD Forecast – Australian Dollar Spikes

AUD/USD Forecast Video for 23.08.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar rallied significantly during the course of the trading session on Tuesday, as we have bounced from the 0.64 level. The 0.65 level above continues to offer a potential target for buyers, or at least people that are closing short positions. Whether or not we can reach that level, then it’s likely that we can see quite a bit of selling pressure, assuming that we can even make that journey. Regardless, the Australian dollar continues to see reasons to short this market, mainly due to the fact that the Federal Reserve continues to be very tight with its monetary policy, and of course the Australian dollar is so highly levered to the mobile economy, and of course risk appetite.

The 50-Day EMA currently hangs around the 0.66 level, and is racing lower. That could be a potential technical resistance barrier that it’s going to come into the picture. All things being equal, I do think that the Australian dollar is a currency that you don’t necessarily want to own right now, especially against the US dollar. If we were to break down below the lows of the last week, then it’s possible that we could drop down to the 0.63 level, perhaps even lower than that.

That being said, we have sold off quite drastically over the last couple of months, so a little bit of a recovery would not be completely out of the question. The action on Monday certainly had that attitude, so I’m more of a “fade the rally” type of situation. All things being equal, the market is likely to continue to be noisy in general, and therefore I think at this point you have to look at it through the prism of trying to find value in the greenback, due to the fact that the market has fallen so far. In other words, you don’t necessarily just jump in and start shorting after a huge move like we have seen. A little bit more of a measured short-term approach probably is called for, thereby taking advantage of little bits and pieces of short positions along the way.

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