AUD/USD Forecast – Australian Dollar Breaks Down a Bit

AUD/USD Forecast Video for 06.12.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has shown itself to be very negative during the trading session on Tuesday, slicing below the 200-Day EMA. This is a negative turn of events, and it could send the Australian dollar plunging, but it’s a bit early to make that statement. After all, there is a lot of noise right around the 200-Day EMA typically, and therefore you’ve got a situation where the market is trying to sort out where it’s going to go longer-term, and it’s also worth noting that the Australian dollar is highly levered to the idea of risk appetite. If risk appetite starts to wane, that of course is very negative for the Aussie.

Furthermore, you also have to pay attention to the fact that interest rates in the United States have been falling for a while, and that helps anything against the US dollar, despite the fact that the Australian economy is so highly levered to China, which isn’t exactly showing a massive amount of strength at the moment. At this point, if the market were to break down below the 0.65 level, then it opens up the possibility of a move down to the 50-Day EMA, and then possibly down to the 0.64 level.

It’s also worth noting that the market had originally pulled back to the 61.8% Fibonacci level, which obviously attracts a lot of people. In general, the last couple of days have shown just how negative the Aussie is all of a sudden, but the volatility continues to be a major issue, and therefore I think it’s probably a scenario where you need to be very cautious with your position sizing. That being said, if we were to break above the top of the candlestick from the Monday session, it would be a very bullish turn of events, and could send the Australian dollar looking toward the 0.69 level over the longer term.

Either way, be cautious with your position sizing because the Friday session features the Non-Farm Payroll announcement, which obviously will have a massive effect on the US dollar itself. In that scenario, you could find yourself in serious trouble if you are not careful with a huge position going against you.

For a look at all of today’s economic events, check out our economic calendar.