AUD/USD Forecast – Australian Dollar Continues to Grind Lower

AUD/USD Forecast Video for 28.09.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has fallen a bit during the trading session on Wednesday, as we continue to see a lot of negativity. The 0.6350 level is an area that has been supported previously, and therefore it makes a certain amount of sense that we did bounce from there in the middle the day. If we were to break down through that area, it would be very ugly for the Aussie dollar, and we would probably continue to drop toward the 0.62 level. Keep in mind that the Australian dollar is highly levered to the commodities market, and of course the overall risk appetite of global growth.

Looking at this chart, the market has been in a falling wedge for a while, although we have not broken out of it. If we were to break out above the 50-Day EMA, then the rising wedge suggests that we could go just a little bit above the 0.66 handle. That of course would take quite a bit of momentum, but you never know. I look at rallies at this point in time as a selling opportunity, as interest rates in the United States are not calming down and quite frankly the Australian central bank has to worry about deterioration in conditions when it comes to China and other major markets.

The one thing that could help Australia is if there’s suddenly a run toward the gold, but right now that doesn’t seem to be the case. In fact, gold is starting to struggle so we may see a big move against the Aussie just as easily. Yes, we are at extremely low levels, but markets do tend to crash from oversold conditions to begin with. It’s almost like a trap door opens up, which might be what we are getting ready to see. At this point though, it’s obvious that the 0.6350 level has a significant amount of support right around it, and therefore it’s an area that you need to pay special attention to, as the market has clearly shown it to be an area of interest by value hunters.

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