AUD/USD Forecast – Australian Dollar Stabilizes

AUD/USD Forecast Video for 04.08.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has gone back and forth during the course of the trading session on Thursday, as it looks like we are trying to stabilize right around the 0.65 level. Keep in mind that the jobs number comes out on Friday, this makes a huge difference as to where we go next. At this point, if we do rally from here, the 0.66 level could be a major resistant barrier as it was previous support. If we break down below the bottom of the candle, then it’s likely that we will threaten the 0.65 level to the downside, perhaps unleashing a bevy of selling pressure down to the 0.64 level.

All things being equal, this is a market that I think shows a lot of volatility more than anything else, due to the fact that the Australian dollar is so highly sensitive to the global economy and the commodity markets, as we have seen so much in the way of uncertainty. Looking at this chart, it looks as if a short-term reprieve is coming, but if that jobs number coming out of America is hotter than anticipated, this will send the Australian dollar plunging. All things being equal, the interest rate differential should continue to favor the US dollar, but hope burns eternal when it comes to traders.

It’s not until we break above the 50-Day EMA, near the 0.67 level, that the market remains very bearish, but if we were to take that out, then the market could go to the 0.69 level. In general, I think this is a situation where you need to be cautious with your position sizing, but given enough time we should see a more obvious trade. After all, the last couple of days have been rather negative, so it does make a certain amount of sense that we would see a bit of a bounce. However, there is so much in the way of noise above that I think it’s likely we see the plenty of selling pressure that will come into the picture and send the value of the US dollar higher against the Aussie dollar.

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