AUD/USD Forecast – Australian Dollar Attempts to Bounce

AUD/USD Forecast Video for 10.11.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has found the 0.64 level slightly supportive, which makes a certain amount of sense considering it is essentially “fair value” of a larger consolidation area. This is an area where you would think a lot of people would be interested, due to the fact that it is a large, round, psychologically significant figure, and it is obviously an area where traders have stepped in recently to try to take advantage of either buying or selling opportunities. Furthermore, you also have the 50-Day EMA in the same area, so it all ties together for an area that could cause a bit of a reaction.

If we were to break down below the 0.6380 level, then I think it opens up more selling, perhaps a drop back to the 0.63 level over the longer term. Ultimately, I think this is more likely than not going to happen, but the question is more or less whether or not we need to bounce between now and then to show signs of value? After all, the market has been in tune with the idea of “buying cheap US dollars” for some time now, and therefore I don’t see that changing anytime soon. In fact, even though the Reserve Bank of Australia raised rates recently, the market has done nothing but fall since then.

Keep in mind that Australia is highly leveraged to China, and economic numbers out of China continue to deteriorate. This is not a good look for the Australian economy, and therefore it does make a certain amount of sense that we would have to see a lower value for the Aussie dollar. However, if we were to turn around and take out the 0.6525 level, then it opens up the possibility of a move to the 200-Day EMA. If we drop from here and break down below the 0.63 level, they could be somewhat disastrous for the Aussie dollar as it would be a breach of a major support level going back quite some time. Either way, I think with all the geopolitical headlines and the concerns about recession out there, the Aussie dollar is more likely than not going to have a lot of volatility.

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