AUDUSD Forecast – Aussie Gets Crushed During Friday Trading Session

AUD/USD Forecast Video for 26.06.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar initially tried to recover a bit during the trading session on Friday but has since gotten absolutely hammered. Looking at this chart, you can see that we are now below the 50-Day EMA, but it’s very unlikely that will matter as much because the volatility is starting to pick up. You can see that we had been consolidating in a rectangle previously but then blew through its highs and lows. With this, we are just seeing the extension of volatility to a more extreme matter. After all, the Australian dollar is highly sensitive to the global economy, and therefore you need to be cautious with all of those concerns right now.

The size of the candlestick is somewhat telling, and it now suggests that we could drop all the way down to the 0.66 level. That is the previous bottom of the consolidation area we had been in, but we have broken through there. In other words, it looks like the market had been winding very tightly, and then just blew through both sides of recent trading. Now the question of course is whether or not the market is going to finally settle in one direction or the other. Quite frankly, this is still going to be a very difficult market to hang onto, so I would be cautious with my position sizing even though it certainly looks like we are falling apart at the moment.

The Reserve Bank of Australia recently shock the market by raising interest rates 25 basis points, but since then we have seen Jerome Powell suggest that there are at least one, if not 2 more interest rate hikes between now and the end of the year. With this, I think we have a situation where we will continue to be very erratic, but at the end of the day it’s likely that the best thing you can do is either avoid the Aussie dollar, or trade with a smaller position size in order to mitigate the massive amount of risk that you could be facing over the next several weeks. Pay attention to the US dollar in general, that’s probably the driver here.

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