AUDUSD Forecast Video for 29.05.23
Australian Dollar vs US Dollar Technical Analysis
The Australian dollar bounced a bit during the trading session on Friday, showing signs of life again after a significant selloff. That being said, this could be a little bit of a “dead cat bounce”, as markets can’t go in one direction forever anyway. Just above, I would anticipate that the 0.66 level should offer significant resistance, as it was previous support. This, of course, is typical “market memory” action, and therefore I think the market will probably look at it as such.
Keep in mind that the Australian dollar is very sensitive to commodity markets, so you want to pay attention to those as well. Ultimately, I think we got a situation where the trading public will continue to look toward the US dollar for safety, as we have many recessionary headwinds just waiting to get in the way. Regardless, this is a situation where I think we are going to see a lot of back and forth, and then a lot of reaction to overall fear.
At this juncture, a break above the 0.66 level would of course be very bullish, but you will have to deal with the 50-Day almost immediately, which of course a lot of technical traders pay close attention to. In other words, I think it’s probably going to be a “fade the rallies” type of situation now that we have broken out of that major consolidation area. The measured move is for 200 points, and therefore I’m anticipating that this market probably drops to the 0.64 level given enough time. If we break down below there, then we should see a bit of a flush lower. That would make a certain amount of sense considering everything that’s going on right now, especially in the global outlook.
Pay close attention to China it has an effect on the Aussie economy as well, as China is Australia’s largest market, and the 2 economies are highly interlinked. We do have a central bank decision in Australia in a couple of weeks, so that could give us a bit of clarity on monetary policy direction, but at this point it seems like fear is starting to grip the markets more than anything else.
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This article was originally posted on FX Empire