AUD/USD Forecast – Australian Dollar Plunges Early on Wednesday

Australian Dollar vs US Dollar Technical Analysis

As you can see, the Australian dollar has fallen rather significantly during the early hours on Wednesday, reaching the 200 day EMA. At this point in time, we are getting fairly close to the middle of the overall consolidation. So, it’ll be interesting to see if we continue to plunge. The consolidation, which was bordered by the 0.665 level on the top and the 0.645 level on the bottom continues to be paramount as far as technical analysis is concerned. It’s worth noting that the Reserve Bank of Australia chose to do nothing the other day and therefore we are through the central bank noise between the Federal Reserve and the RBA.

This now will more likely than not come down to interest rates in the United States and of course risk appetite. All things being equal, I do believe that a lot of the major currency pairs this year are going to be very neutral. And if that’s the case, this might be the bulk of the range for the year just as it was during parts of previous years. In general, the Australian dollar needs a strong global economy, strong commodity markets, perhaps most importantly, a strong China to flourish. At this point, it looks like with all of the geopolitical concerns, the recessionary headwinds, and the fact that China is still somewhat struggling, it’s going to be difficult for the Australian dollar to truly take off. At this point, I think we’re just going back and forth between the two major levels, and now are approaching the midway point between them.

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