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AUDUSD Forecast – Australian Dollar Gives Up Early Gains After Rally

By:
Christopher Lewis
Published: Mar 23, 2023, 13:01 GMT+00:00

The Australian dollar initially rallied during the trading session on Thursday to test the same consolidation area where we have seen a lot of noise previously.

Australian dollar, FX Empire

In this article:

AUDUSD Forecast Video for 24.03.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied a bit during the trading session on Thursday to test the area between the 0.67 level and the 0.68 level. This block of trading had previously been a significant consolidation range, and now that we have tested it a couple of times and pulled back, it is starting to show just how important it is going to be. 0.67 level is an area that has been important multiple times going into the past, so the fact that we are struggling right around that level does catch my attention.

For what it is worth, it looks as if we are forming some type of rising wedge, and that rising wedge will be a very bearish formation if it kicks off to the downside. Breaking down below the bottom of the wedge opens up the possibility of a move down to 0.6550, and perhaps even lower than that. After all, the Australian dollar is a currency that a lot of people run to in times of “risk on appetite” and run away from when risk appetite evaporates. There are a lot of moving pieces right now in the global economy, so it does make a lot of sense that the Aussie would struggle.

All of that being said, if the Australian dollar can break above the 0.68 level, then it opens up a move for 100 pips or so, where we would then see the 200-Day EMA tested. All things being equal, that would be a very good sign for risk appetite and a very poor sign for the US dollar, and I suspect that the US dollar would start falling against almost everything in that environment. Regardless, it certainly looks as if we are starting to see cracks in the pavement as far as risk appetite is concerned, so it certainly looks as if the US dollar will probably come out ahead eventually. That being said, it’s obviously going to be very noisy along the way, so make sure you keep an eye on your positions and keep them reasonably sized as the volatility could pick up.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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