AUDUSD Forecast – Australian Dollar Continues to Fight Overhead Resistance

AUDUSD Forecast Video for 05.05.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has gone back and forth during the trading session on Thursday as we continue to see a lot of noisy behavior just above. We have the 50-Day EMA at roughly 0.6715, and of course we have the bottom of that bearish flag that we had just broken through. Both of these can cause a significant amount of resistance, it is probably worth noting that we continue to worry about overall global growth. With that being the case, the market is likely to see signs of exhaustion that traders can sell into. After all, the Australian dollar being so sensitive to the global economy and commodity demand makes it particularly vulnerable.

If we were to turn around a break down to a fresh, new low, roughly somewhere the 0.6550 level, then we could see a huge breakdown, perhaps ending the market to fulfill the “measured move” of the bearish flag, meaning that we could go all the way down to the 0.62 level rather quickly. On the upside, if we were to break above the 50-Day EMA, it would take quite a bit of effort to do so, but in that environment, you could make a move toward the 0.68 level, which currently has the 200-Day EMA sitting at it, making it a nice target.

A lot of this will come down to the US dollar, and what it’s doing as far as risk appetite is concerned. The Federal Reserve raised interest rates by another 25 basis points and reiterated that they are going to stay tight for longer than people expect, and therefore the US dollar may continue to strengthen over the longer term as a result. Not to be outdone, the Australians have recently had a surprise interest rate hike, so there will be a lot of choppy and noisy behavior here as there are so many different moving pieces pushing the markets around in both directions. Because of this, position sizing and being nimble will be your 2 biggest advantages going forward.

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