AUDUSD Forecast – Australian Dollar Bounces

AUDUSD Forecast Video for 02.05.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has bounced a bit during the Monday trading session which of course was Labor Day around the world. Because of this, there was a certain amount of thin liquidity that would have to be taken into account, so therefore I would not read too much into the bounce other than there is no reason to go lower.

The 0.66 level underneath has been an important support more than once, so such a huge surprise to see a little bit of a bounce from here. However, it’s also worth noting that the market has recently formed a massive bearish flag, and of course a potential “H pattern.” Both of those are very negative signs, and essentially tell the same story. Because of this, I do think that it is probably only a matter of time before the Australian dollar falls a bit, although short-term bounce certainly cannot be ruled out. After all, the area has been important multiple times and of course has shown itself to be somewhat resilient. That being said, it could be just a speed bump along the way to lower prices, as it’s obvious that the global situation is very tenuous at best, and of course the Australian dollar is well known to be a “risk on currency.”

If we break down below the bottom of the hammer from Friday, then it opens up a move to much lower levels, perhaps down to the 0.65 level, possibly down to the 0.62 level. On a rally, I would anticipate that the 50 day EMA above offers a bit of the ceiling, that’s assuming that we can break back above the previous trendline that makes up the bottom of the bearish flag marked on the chart. Nonetheless, this is a market that certainly looks negative, so if we are seeing signs of exhaustion after short-term rally, I will be more than willing to start shorting again as the trend or the momentum both are starting to point toward the downside. All things being equal, I think this continues to be a “fade the rally” type of market. That’s been the case for a while, and I just don’t see that changing anytime soon in this environment.

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