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AUD/USD Forecast – Australian Dollar Gives Up Early Gain

AUDUSD Forecast Video for 08.05.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied a bit during the trading session on Friday, breaking well above the 50-Day EMA. By doing so, the market looks as if it is going to continue to see a lot of volatility, and downward pressure. This is not a huge surprise at all, considering the fact that the market has seen a lot of negativity over the longer term, and this short-term rally shows signs of fading already. After that action, one would have to assume that we will continue to see the Australian dollar suffer. After all, the Reserve Bank of Australia recently had a surprise interest rate hike, only to see the market fade afterwards.

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Jerome Powell has reiterated his desire to stay tight for as long as it takes to bring inflation down, therefore it’s very likely that the economy is going to slow down eventually. Having said that, the jobs number coming out hotter than anticipated on Friday certainly shows that inflation is still a very serious situation in the United States, because if people are employed, demand will not drop. All things being equal, this is a market that also has to worry about the 200-Day EMA above, which is near the 0.68 level.

Looking at this chart, signs of exhaustion will continue to be jumped on, but this is a situation where noise is going to continue to be a major issue in general. Keep in mind that the Australian dollar is highly sensitive to economic pressures and global growth. With that being the case, I would be very cautious about getting aggressive at this point, because there are so many concerns around the world when it comes to the economy. That being said, China is starting to show signs of strengthening, and therefore that could help the Australian economy and demand for its metals. With this being said, it’s very likely that we have a situation where the market will eventually figure out where wants to go, but right now it seems like we are swimming upstream more than anything else.

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

This article was originally posted on FX Empire

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