AUD/USD Forecast – Aussie Dollar Continues to Look Overbought

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar initially tried to rally a bit during the course of the trading session on Wednesday but gave back gains as we peaked just a little too far to the upside. At this point in time, the market looks like it is going to pull back and perhaps try to get rid of some of the overbought froth. But also, you have to keep in mind that the Australian dollar has been consolidating for quite some time. So, we are at the top of that range and simply put, I don’t see anything changing. If we do fall from here and break down below the 0.67 level.

Then I think you have a situation where the Australian dollar probably falls much further, maybe even as low as 0.6450. On the other hand, if we can break above the 0.6850 level, that would be a major breakout and could send the Aussie much higher. In that environment, I anticipate that you would see the US dollar getting hammered against almost everything, and it wouldn’t necessarily be an Australian dollar story, but it might just be a US dollar story.

As things stand right now, when you zoom out and look at the longer term chart, you can see that we’re at the top of the consolidation area that we have been in for about 18 months. So, we are definitely at a major inflection point, and could see a big move sooner or later, especially with the PCE numbers coming out on Friday.

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