AUDUSD Forecast – Australian Dollar Looking For Stability

AUDUSD Forecast Video for 09.03.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied slightly during the trading session on Wednesday, but it is more likely than not going to be an opportunity to sell this pair at the first signs of exhaustion. During the Tuesday session, Jerome Powell suggested that the Federal Reserve could very well have to increase the rate of interest rate hikes going forward, which shocked the market. After all, a lot of the large fund managers out there were expecting the Federal Reserve to roll over and give them cheap cash to gamble with, and quite frankly a lot of these funds desperately need the Federal Reserve to loosen monetary policy. In other words, this is a situation where it’s more a matter of hope than reality.

If we break down below the lows of the trading session for Wednesday, I suspect that we will flush much lower, perhaps down to the 0.64 level. Keep in mind that the Australian dollar will continue to move with risk appetite, and if risk appetite were to suddenly be lacking, it does make quite a bit of sense that we would see the US dollar strengthened overall. After all, the US dollar is considered to be a safety currency, while the Australian dollar is heavily influenced by commodities and risk appetite globally. If the global economy is starting to slow down, then it makes a lot of sense that we would see demand for Australian commodities drop.

Furthermore, there are some questions about the China reopening in play, which might be struggling, and therefore it’s likely that the Aussie will struggle right along with it. The size of the candlestick from the Tuesday session is the kind candlestick that very rarely happens in a vacuum, so a bit of follow-through would be anticipated. Either way, I don’t have an interest in buying the Aussie dollar anytime soon, at least not until we break above the 0.68 level, which is the top of the major consolidation region that we just busted out of. Furthermore, we have the so-called “death cross” happened recently, and therefore longer term traders may look at that as a reason to get involved to the short side.

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