AUDUSD Forecast – Australian Dollar Gives Up Early Gains

AUDUSD Forecast Video for 03.04.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar initially tried to rally during the trading session on Friday, reaching towards the 50-Day EMA. We gave back the gains to show signs of exhaustion to form a bit of a shooting star, but there is also a significant amount of support underneath. Because of this, we could get a very noisy couple of days, but that would be nothing new to the Aussie. The 0.67 level has been an area of resistance multiple times, and therefore it’s likely that the area will continue to be important.

Looking at this chart, I think it’s possible we could drop to the 0.66 level, which of course is an area where we have seen support previously. Anything below there then opens up the door to even more negativity. Ultimately, I think in that situation, we could see a much more vicious selloff. The market would then more likely than not be in a state of “risk off” behavior, as the Australian dollar is considered to be a currency that’s highly sensitive to global growth, and of course commodities as Australia’s well-known to be a major exporter of hard commodities such as gold, aluminum, iron, copper, and the like. Ultimately, this is a market that is a bit of a barometer on how people feel about global growth and whether or not central banks are going to continue to see the need to continue raising rates.

Ultimately, it’s not until we break above the 0.68 level that I would be convinced of any real strength in the Aussie, as it would not only break through the 50-Day EMA, but the cluster of trading from a couple of weeks ago. I think that’s going to be an area that’s going to give a lot of headaches to buyers, so at this point I’m looking for signs of exhaustion to sell, just as we have seen on Friday. Whether or not we get some type of major breakdown is a completely different question altogether, but I think it’s much more likely at this point than to suddenly take off to the upside. Furthermore, higher interest rates in America continue to make the dollar more attractive.

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