AUD/USD Weekly Forecast – Australian Dollar Gives Up Gains for the Week

AUD/USD Forecast Video for 10.04.23

Australian Dollar vs US Dollar Weekly Technical Analysis

The Australian dollar initially tried to rally during the course of the week, but gave up gains near the 0.68 level again, which is an area that has been important multiple times in the past and has offered a massive amount of resistance. That being said, the inverted hammer for the week does suggest that perhaps we have more downward pressure coming, and if we break down below that candlestick, it could open up a move down to the 0.66 level, possibly down to the 0.65 level. Ultimately, if we do get a short-term rally, signs of exhaustion could very well come into the picture and start the selling pressure again.

If we were to somehow turn around and take out the top of this candlestick, that would obviously be a very bullish sign and could send the Australian dollar looking for the 0.70 level again. It’s been a while since we’ve been there, so at this point, I think it would probably take some type of fundamental shift. The fact that we ended up forming such a negative candlestick does suggest that it’s going to be very difficult to continue.

All things being equal, I expect to see a lot of noisy behavior, and therefore you need to be cautious with your position sizing. Remember that the Australian dollar is highly levered to the commodity markets and of course global growth. As we have a lot of questions out there about both, then it does make a certain amount of sense that we would see a bit of hesitation in the Aussie dollar as far as where it’s going. Nonetheless, I do think that there are a lot of moving pieces out there so you need to be very cautious and expect a lot of volatility.

Now that we have Non-Farm Payroll numbers out of the way, we now have to start focusing on CPI numbers next week. Inflation in America will have a lot to do with where we go next, so you need to be very cautious. Position sizing will be everything, and therefore you need to be cautious about the idea of getting too over levered.

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