AUDUSD Forecast – Aussie Bounces Slightly

AUDUSD Forecast Video for 10.03.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar bounced a bit during the Thursday trading session to show signs of life after a significant selloff during the week. At this point, the market looks as if it is trying to threaten the 0.65 level underneath, which is a large, round, psychologically significant barrier, but more importantly, an area where we had seen previous support. Breaking through the bottom of the Wednesday candlestick would kick off more selling, as it would break the bottom of an inverted hammer.

At that point, I would expect to move down to the 0.6440 level, where we have another cluster of support. After that, then we are looking at the 0.63 level. This would make a certain amount of sense considering that there are a lot of concerns about the global economy, and of course the Federal Reserve looking to stay tight with its monetary policy for longer than most people anticipated. Furthermore, we also had Jerome Powell speaking in front of Congress this week, reiterating his plans to stay tight, and perhaps even accelerate interest rate hikes in the United States.

This would not only have a negative effect on the Aussie because it is being measured against the US dollar, but it will also have a negative effect on the Aussie as the global economy will almost certainly slowdown in that environment as well. Because of this, there will be less demand for Australian commodities, and that of course will cause major issues in general. Beyond that, general risk appetite seems to be shrinking, so it’s difficult to get overly bullish of any risk asset at this point. Even if we do rally from here, it looks like that breach of 0.67 will end up being significant resistance on the way back out, so any rally at this point is probably somewhat limited in that environment.

Fading the rally will more likely than not continue to be the way forward, as the US dollar looks likely to flex its muscles yet again. Ultimately, this is a market that would have a lot to prove before buyers would feel comfortable. This is especially true now that we have recently had the so-called “death cross” form in the pair.

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