AUD/USD Forecast – Australian Dollar Tests 50-Day EMA

AUD/USD Forecast Video for 02.10.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied significantly during the trading session on Friday, at least in the early hours. That being said, we are struggling with a 50-Day EMA, and that of course is something that a lot of people will be paying attention to. If we were to break out above the 0.6530 level, then it opens up a move to the 0.66 handle, an area that previously has been important. That being said, the market is going to continue to be very noisy, and I think at this point in time we are probably more likely to see downward pressure than up over the longer term, as there are so many concerns when it comes to the global growth situation. Furthermore, the Federal Reserve continues to be very tight with its monetary policy, and that of course drives the US dollar higher.

The falling wedge that you can see on the chart is a technical pattern that a lot of people might be paying attention to, but at the end of the day that would only suggest that the market is seeing a little bit of a short-term pullback, and what has been a very negative market, and there’s really nothing out there to change the overall attitude. The Federal Reserve isn’t changing its attitude, and of course gold isn’t helping the Aussie as of late either. With that being said, the market is likely to continue to see a lot of volatility, and that doesn’t help risk assets such as the Aussie dollar either.

Ultimately, I think that the overall choppiness of this pair continues, so you need to be cautious with your position sizing and recognize when you are wrong. That being said, I don’t think most trades are going to last more than a couple of days, at least until we get some type of definitive move. We certainly don’t have that right now, so I think at this point, we are more likely than not going to continue to see a lot of rapid movement in both directions. I would keep my position size reasonable and treat this more or less as a range bound market, which is highly volatile at the moment.

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