AUDUSD Forecast – Australian Dollar Touches 50-Day EMA

AUDUSD Forecast Video for 03.05.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied significantly during the trading session on Tuesday, reaching the 50-Day EMA as the Reserve Bank of Australia had a surprise interest rate hike overnight. That being said, the market still has to worry about a lot of moving pieces, not the least of which will be the fact that the global economy is almost certainly slowing down. Because of this, I think you need to be very cautious about trying to get long here, especially as the Federal Reserve is up next during the Wednesday session.

The Australian dollar course is very highly levered to global growth, and right now we have a lot of questions around the world as to how that is going to go. Keep in mind that the Chinese numbers recently have been less than appealing, so that obviously has a lot of negativity attached to the Australian dollar as well. The 50-Day EMA is an indicator that a lot of people will pay attention to, so I do think that it is probably only a matter of time before we see some type of resolution to this issue, as we have a lot of headwinds out there and both fundamental and technical manners.

Even if we were to break above the 50-Day EMA, the 0.68 level above is a massive ceiling, as the 200-Day EMA sits right in that same area, and it has a lot of historical importance. On the other hand, if the market were to trigger on a break down from here, keep in mind that the 0.66 level is an area that has a lot of interest attached to it as well as it is the bottom of the “H pattern.” Furthermore, we are testing a bearish flag, so it will be interesting to see if that holds as resistance. Ultimately, I do think this is a situation where eventually the market will have to make a bigger decision, and I think that with Jerome Powell being anywhere near as hawkish as he has hinted tomorrow, that could send this market lower over the next couple of weeks. It’s not until we break above the 0.68 level that I would consider possibly buying this market.

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