AUDUSD Forecast Video for 17.05.23
Australian Dollar vs US Dollar Technical Analysis
The Australian dollar has gone back and forth during the course of the trading session on Tuesday as we continue to see a lot of confusion in the currency markets. After that, the market will start to focus on the risk appetite around the world, and whether or not the economy is going to be slowing down. Always remember that the Australian dollar is highly sensitive to commodity markets, and therefore you should pay attention to certain commodities such as gold, iron, and aluminum. Furthermore, you have to pay attention to the Chinese economy, because the Australian economy is so intertwined.
Currently, traders believe that the Federal Reserve is going to loosen monetary policy sooner than the Federal Reserve claims, and as long as that’s the case, there will be a bit of a “push/pull” dynamic to this market going forward, and this is shown by the massive support at the 0.66 level, and the massive resistance above at the 0.68 level. This 200-point range has been crucial for some time, so if we can break out of it, it’ll be interesting to see where the market starts to run toward. The “measured move” is going to be for 200 points as well, so keep an eye on a daily breakout because if we break to the upside, this market could very well end up at the 0.70 level, while a breakdown could send this pair down to the 0.64 level.
If we were to see a huge “risk-off move”, that will almost certainly work against the value of the Australian dollar, as traders will run toward the US treasury markets. Ironically, the fact that the Americans are having trouble coming together for the debt ceiling issues actually drives even more demand in the market for the US dollar as traders try to find safety, despite the fact that that very safety might be threatened. In other words, expect more volatility and confusion, which generally favors sideways action anyway. At this point, breaking out of this range will need some type of strong fundamental reason to make that happen and therefore with a relatively light economic calendar it will probably come in the form of news.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire