AUDUSD Forecast – Aussie Sets at The Bottom of the Flag

AUDUSD Forecast Video for 04.05.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has risen slightly during the trading session on Wednesday as we wait for the Federal Reserve announcement. Quite frankly, this is a market that I think continues to see a lot of noisy behavior, and of course a lot of confusion. Ultimately, this is a market that I think will have to make a bigger decision and the central bank meeting could be that catalyst.

It does appear that the Federal Reserve is likely to continue seeing reasons to stay tight, and if they do, then it’s likely that we would see a lot of US dollar strength. However, if the market were to turn around and take out the 50 day EMA above, then we could go to the 200 day EMA near the 0.68 level. Obviously, that would be a very strong sign, and it could really send this market much higher. On the other hand, if the market were to turn around and show signs of negativity, we could go looking to the 0.66 level. This obviously would be very “risk off”, as the Australian dollar is so highly levered to risk appetite in general.

A lot of this will come down to perception of what Jerome Powell has to say, but obviously there will be a lot of noisy behavior due to the fact that the European Central Bank has a meeting the next day. With that being the case, it’s likely going to be a very noisy couple of days, but I still favor the downside in general, as the Australian dollar has had a rather mute reaction to the surprise interest rate hike the other day, therefore I think we’ve got a situation where the Aussie will continue to see lackluster returns, as there are so many concerns around the world right now with the global growth situation.

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