AUDUSD Forecast Video for 05.06.23
Australian Dollar vs US Dollar Technical Analysis
The Australian dollar has rallied quite significantly during the trading session on Friday, as we have broken above the 0.66 level. That being said, the market is very likely to see a lot of noisy behavior in this area, especially as the 50-Day EMA is starting to race to the downside. That obviously offers a bit of technical resistance, and therefore it’s likely that we would see a lot of noise given enough time. If we break down below the 0.66 level again, then I think it shows that the trading community is still looking to buy US dollars, despite the fact that we have had a very nice bounce.
The Aussie had broken down below the bottom of a major consolidation region, and therefore it’s not a huge surprise to see a retest of this area. That being said, we would need to see a huge move to break the trend, with the very minimal area being the 200-Day EMA. Yes, we could reach the top of the previous consolidation area, which is at the 0.68 level, but I think that would take an extraordinarily bullish move and therefore at that point I would need to see some type of major shift in the overall attitude of the market.
Once we break down below the 0.66 level, I will start to short this market yet again, as it would show that we have failed. At that point, I would anticipate a move to the 0.65 level, with the overall target still be in the 0.64 level underneath, an area that is the “measured move” of the breakdown out of the consolidation region. With this, I think it’s probably only a matter of time before we get there, but this will take a significant amount of patience to make that happen, as the market continues to jump from one narrative to the next. That being said, it’s very difficult to imagine a scenario where we suddenly take off economically and commodities get a longer-term floor in the market at the moment, both of which would be needed for the Aussie to take off.
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This article was originally posted on FX Empire