AUDUSD Forecast – Aussie On The Verge of a Breakdown

AUDUSD Forecast Video for 01.05.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has fallen a bit during the trading session on Friday, as we continue to see a lot of noisy behavior, and I think there are a lot of concerns out there that continue to weigh upon traders in general. At this point, the market could reach the 0.6550 level, an area that has previously been supported in the past. If we break down below there, then it’s likely that the market goes looking to the 0.65 level, and then the bottom falls out. In that environment, it’s likely that we continue to see the US dollar strength in general, and of course a lot of risk assets getting pummeled.

The bearish flag that I have drawn on the chart certainly opens up the possibility of a move down to the 0.62 level. Furthermore, you could also make a huge “H pattern”, and that pretty much says the same thing. Ultimately, I think the Aussie continues to suffer at the hands of a lot of fear out there, and of course the idea that the global economy is going to slow down. If that’s the case, then it’s really difficult to see why the Australian dollar or the Australian economy would start picking up. In this environment, I think you continue to see this market is one that you can sell on rallies, and it certainly looks as if the Reserve Bank of Australia has given up the idea of tightening monetary policy as they have sat on their hands a couple of meetings in a row.

On the other hand, the Federal Reserve is looking to keep monetary policy tight, so I do think it’s probably only a matter of time before we see this interest rate expectation differential play out in the market, and of course the run toward safety in the form of US Treasuries. This is a market that I believe is a good barometer of where risk appetite is heading, and it certainly looks as if it is not heading in a good direction. With this, I fade rallies, and I most certainly would sell a breakdown. I have no interest in buying the Aussie anytime soon.

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