AUDUSD Forecast – Australian Dollar Gaps Higher to Kick Off the Week

AUDUSD Forecast Video for 14.03.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has gapped higher during the trading session on Monday to show signs of life, and then shot straight up in the air. By doing so, the market looks very strong, at least initially. However, since then we have seen a lot of selling pressure, therefore it looks like the sellers are coming back. Ultimately, the 0.67 level above is an area that I had suggested we could have some trouble at, and we have sold off from there quite drastically.

The Australian dollar of course is highly levered to the commodity markets; therefore, it does make quite a bit of sense that we would see quite a bit of noise here. The 0.67 level above has been an area where we have seen previous support, so the market memory in that area does make quite a bit of sense. At this point, I think that continues to be a short-term ceiling. If we can break above the 0.67 level, then it’s possible that we could go to the 0.68 level, which is the top of that little consolidation area that we had been in previously.

Any move below the bottom of the recent range could open up a move down to the 0.65 level, a large, round, psychologically significant figure, and should be a situation where a lot of people will be getting involved. If that’s going to be the case, then we probably have a bit of a fight on our hands. The market breaking down below that level then opens up a flush lower, perhaps down to the 0.63 level, and maybe even lower than that if things get out of hand.

Keep in mind that the Federal Reserve continues to reiterate its desire to keep monetary policy tight, and of course Jerome Powell has recently suggested that perhaps the Federal Reserve might even start to increase the rate of interest rate hikes, so therefore it should continue to put a lot of demand into the US dollar as the economy around the world is probably going to slow down as a result. Ultimately, I think this is a pair that you continue to fade rallies going forward, and therefore I continue to look for those opportunities.

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