AUD/USD Forecast – Australian Dollar Testing the Top of Wedge
AUD/USD Forecast Video for 20.09.23
Australian Dollar vs US Dollar Technical Analysis
The Australian dollar has rallied a bit during the trading session on Tuesday, as we are testing the top of a massive falling wedge. Whether or not we can break out remains to be seen, and it would be a bit of a stretch to think that it happened suddenly before an FOMC meeting during the next day. After all, a lot of traders will be cautious about getting too overexposed heading into what would obviously be a major event. After all, nobody really knows what will happen although the market is not expecting an interest rate hike, but the real fireworks will have to do with the press conference afterward, and the perception as to what the Federal Reserve will do going forward.
Because of this, it’s a bit difficult to garner what’s about to happen, therefore it’s just not worth taking the risk. As long as that’s the case, it’s difficult to imagine people shorting the dollar for much longer. After the press conference, things may change, but right now it looks as if the Aussie dollar is about to continue the same pattern of fading the rally that it has seen for multiple days. Even if we do break out to the upside, it’s very likely that the 0.65 level will continue to be a bit too much to overcome, and I think that is your “ceiling in the market.” Anything above there would obviously be very bullish, especially as the 50-Day EMA is hanging around in the same area. Ultimately, I think that the 0.64 level underneath continues to offer support, so breaking down below that level would obviously be very negative for the Aussie dollar, and bullish for the US dollar.
I think the only thing that you can count on at the moment is going to be a lot of choppy volatility, so therefore you have to be cautious with your position sizing, but right now it’s worth noting that we have not broken out of the wedge, and we are still very much in a downtrend. Unless Jerome Powell takes a completely different tone tomorrow, I don’t think we are about to suddenly see a massive uptrend.
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