AUDUSD Forecast – Australian Dollar Continues to See Significant Support

AUDUSD Forecast Video for 01.03.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has fallen a bit during the trading session on Tuesday, just as it had on Monday. Because of this, it makes quite a bit of sense that perhaps we get a little bit of a bounce. It’s obvious that the 0.67 level is offering quite a bit of support, and therefore it’s likely that buyers will step in to try to pick up value. Furthermore, it’s also possible that sellers may choose to take profit near this area as well.

That being said, if the market were to break down below the 0.67 level, then it’s possible that we could go down to the 0.66 handle. After that, then the bottom opens up, and we could go much lower. At that juncture, I would anticipate a move down to the 0.64 level, possibly even as low as 0.62 level.

Keep in mind that the Australian economy is highly levered to the Chinese mainland and of course everything that goes on in Asia as far as growth. Australia is a major exporter of hard commodities such as gold and iron, so it needs global growth to get things moving. As China has reopened, there has been a certain amount of hope out there, but that has been completely torn apart as you can see on the chart. Even if we rally from here, I suspect that it is short-term more than anything else. The 200-Day EMA sits right around the 0.6850 level, as well as the 50-Day EMA.

When you look at the longer-term chart, it has bounced significantly to test the 50% Fibonacci level, and then failed drastically. Because of this, I think you still have to worry about the overall downward pressure, especially as the Federal Reserve remains very tight with his monetary policy, which will probably cause a global recession at this point. In a recessionary environment, it’s hard to believe that commodity currencies will strengthen over the longer term. With this, short-term rallies that show signs of exhaustion will probably be selling opportunities but in the next day or 2 we may have a bounce that short-term traders will be tempted to go in this market for a quick profit.

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