AUDUSD Forecast – Australian Dollar Pierces 200-Day EMA

AUDUSD Forecast Video for 14.12.22

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied significantly during the trading session on Tuesday as we have pierced the 200-Day EMA. That’s a good look, but it’s worth noting that as I record this, we are hanging at the top of the potential rising wedge. The question now is whether or not we are going to see a continuation, or if the Federal Reserve meeting on Wednesday is going to turn things right back around.

All things being equal, we need to pay close attention to the fact that Jerome Powell is going to want risk appetite to dissipate, and therefore it’ll be interesting to see how the Australian dollar reacts as a result. After all, it is highly levered to commodities and China, as well as global growth. The Federal Reserve has to deal with the CPI number that came in at 7.1% year-over-year, which is still horrific, despite the fact that it was 0.2% less than anticipated.

As long as there is structural inflation, and there is, monetary policy is going to remain tight for much longer than a lot of people are used to. This is going to favor the US dollar, but we have not seen much of that as of late. The question now is whether or not the market has gotten too far ahead of itself, or if there’s a little bit more to go. If we can break above the pattern that I have drawn on the chart, then it is possible we go to 0.70 level. You should also keep in mind that we are heading toward the Federal Reserve meeting, the ECB meeting, and then finally holiday illiquidity.

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