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AUDUSD Forecast – Australian Dollar Initially Pulls Back but Finds Legs

By:
Christopher Lewis
Published: May 30, 2023, 13:08 GMT+00:00

The Aussie dollar has initially fallen during the trading session on Tuesday but turned around to find plenty of support later in the day.

Australian Dollar, FX Empire

In this article:

AUDUSD Forecast Video for 31.05.23

Australian Dollar vs US Dollar Technical Analysis

The Aussie dollar initially fell during the trading session on Tuesday but turned around to show signs of fight later in the day. At this point, the Aussie still looks as if it is going to try to test the 0.66 level, at least in the short term. Remember, 0.66 was the bottom of a major consolidation area, and therefore should have plenty of “market memory” attached to it.

At this point, I’m waiting to see if the market can bounce and show signs of exhaustion, which of course I am willing to jump on and start shorting. Underneath, the 0.65 level is an area that should offer support, as it is a large, round, psychologically significant figure in an area that we bounced from already. However, the “measured move” of the consolidation from the last couple of months suggests that we are going to the 0.64 level, and I do think that’s a very realistic possibility given enough time. That being said, you have to remember that the market rarely goes in one direction for an extended move.

At this point, I’m looking for signs of exhaustion that I can start selling again, and won’t hesitate to do so. I believe at this point we are more likely than not to see a retest of than 0.66 level and a failure. Even if we were to break above there, it’s not until we clear the 50-Day EMA that I would be interested in going long this market, especially as commodity markets have been a bit iffy as of late.

Ultimately, this is a “sell the rally” type of situation, and that means that a little bit of patience may go a long way. If we break down below the 0.65 level, then that almost certainly opens up the door for the market to fulfill that measured move down to the 0.66 level. If we were to break above the 50-Day EMA, then it’s possible we could go looking to the 200-Day EMA, which sits just below the 0.68 level and of course is a major indicator that a lot of people look to in order to determine the trend.

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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