AUDUSD Forecast – Aussie Dollar Continues to Show Weakness

Christopher Lewis
Published: May 31, 2023, 12:44 GMT+00:00

The Aussie dollar initially tried to rally during the trading session on Wednesday but gave back gains as we continue to see a lot of negativity out there.

Australian dollar, FX Empire

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AUDUSD Forecast Video for 01.06.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar initially rallied during the Wednesday session, but as you can see we have fallen a bit during the trading session on Wednesday, as we are now below the 0.65 level. By doing so, the market is likely to continue to see negative pressure, and it also looks like we are going to reach the target of 0.64, based on the “measured move” of the rectangle that we just escaped. By doing so, this then has the market looking toward a much more impressive support level.

All that being said, the market is more likely than not going to continue to see a lot of noise, and I do think that if we see a lot of concerns around the world from an economic standpoint, it does make a lot of sense of the Aussie dollar is going to be a victim. After all, Chinese PMI numbers came out weaker than anticipated, and China is a major export target for the Australians. After that, you also have to keep in mind that commodities in general are the biggest part of the Australian economy, and therefore if the commodity markets continue to show weakness, that obviously will work against the value of the Australian dollar as well.

Rallies at this point in time will be looked at with suspicion, especially with the 0.6550 level offering resistance as of late, and then of course the 0.66 level above is the bottom of the consolidation rectangle that we had been fighting and for so long, and that of course will have a lot of market memory attached to it. The 50-Day EMA is starting to race toward the 0.66 level, and therefore I think you’ve got a situation where rallies will give you another opportunity to pick up “cheap US dollars.”

Until risk appetite starts to pick up around the world, it’s difficult to imagine a scenario where the Aussie is going to do well, at least for anything that is remotely sustainable. Having said that, I think the market is more likely than not going to continue favoring the downside and therefore I will trade it as such.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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