AUDUSD Forecast – Australian Dollar Gives Up Early Gain Heading into CPI

AUDUSD Forecast Video for 11.05.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar initially tried to rally during the trading session on Wednesday, reaching toward the 200-Day EMA. The 200-Day EMA of course is an indicator that a lot of people pay close attention to, and it is also just below the 0.68 level. The market has been trading in a 200 point range between the 0.68 level at the top, and the 0.68 level at the bottom.

Looking at the chart, it’s worth noting that we have been grinding away in this area for some time, so I think this is a simple matter of consolidation. The 50-Day EMA sits right at the 0.67 level, which is right in the middle of the consolidation, showing it as potential “fair value.” The Australian dollar of course is going to be very noisy as we have recently seen a surprise interest rate hike coming out of Australia, but at the same time global demand for commodities is almost certainly dropping. All things being equal, this is a market that you will probably have to pay close attention to, because it could be a great risk barometer.

If the market were to break above the 0.68 level, it would not only clear the resistance barrier that we’ve been in recently, but also clears the 200-Day EMA and allows the market to go look into the 0.70 level. If we break down below the 0.66 level underneath, then we are ripping through rather important support, opening up the possibility of a move down to the 0.64 level. In general, this is a situation where we continue to see a lot of noisy behavior, but I think more than anything else range bound traders will be attracted to this market as we try to sort things out. With the global slowdown coming, it does make sense that eventually the US dollar will be attractive for traders if we do in fact continue to see a lot of economic concerns. With this, I think the range bound attitude is more likely than not going to continue, but once it does break out of this range, the Australian dollar should give us a good heads up as to where it’s going.

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