AUD/USD Forecast – Australian Dollar Demonstrates Recovery

AUD/USD Forecast Video for 08.12.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has fallen a bit during the trading session, to test the area just above the 0.65 level. We have turned around to show signs of life at this point, breaking above the 200-Day EMA again. At this point, the market breaking above the top of the previous candlestick would be a very bullish sign. The inverted hammer from the Wednesday session being broken to the upside could send this market back toward the 0.67 level, and possibly even beyond.

With the Friday session featuring the Non-Farm Payroll numbers, it could be the catalyst that gets us moving. All things being equal, the interest rates in America are the big driver of everything that’s going on, and as interest rates continue to fall, that does give us an idea that the Aussie dollar could continue to go higher and drive down the US dollar dropping. All things being equal, this is a market that I think continues to be noisier than anything else, but if we can break above the recent swing high, then we could go look into the 0.69 level.

Underneath, we have the 50-Day EMA sitting right around the 0.65 level, and therefore I think it is a very significant support level. If we were to break down below there, it would obviously be a very negative turn of events. However, I think that traders are hell-bent on the idea that the Federal Reserve is going to loosen its monetary policy, which works against the greenback.

Whether or not the Federal Reserve is going to do this remains to be seen, but at this point I think you’ve got a situation where the market is assuming that loose monetary policy is coming, and that generally sends the Aussie higher as people start to look for a bigger move in the risk spectrum. After all, the Aussie dollar is highly correlated to commodity markets and Asian growth, so that all comes together quite nicely. With this, I think you get a situation where we continue to see noisy behavior, but Friday I think tells the entire tale.

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