AUD/USD Forecast – Australian Dollar Pushes Into Support

AUD/USD Forecast Video for 18.08.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has plunged a bit during the trading session on Thursday, to breakdown below the 0.64 level before turning around and showing signs of life. In fact, we are in the midst of a major bounce as I record this video, so it will be interesting to see how this plays out. The 0.64 level has been a significant support level in the past, so it does make quite a bit of sense that we see this happen. Just above, the 0.65 level is an area that could cause a certain amount of resistance as it was previous support. Even if we break above there, I think there are plenty of resistance barriers to be concerned about, for example the 0.66 level above there.

On the other hand, if we were to break down below the bottom of the session for Thursday, this market could really start to fall apart. Keep in mind that the Australian dollar is very sensitive to risk appetite and global movement of currency, as well as demand for commodities, so therefore you need to be cautious about getting overly aggressive when there are so many problems around the world. However, if we do see positive news, the Australian dollar might be the first place people run to. After all, it is based on the idea of Asian growth, and of course the idea of demand for hard materials from Asia more than anybody else.

We are a little overextended to the downside, so I think it’s possible that the market needs to bounce regardless, so therefore I would not get short at this point, unless of course we do break down below the bottom of the candle for the day. In general, I think you can expect a significant amount of messy trading, which has been the hallmark of these last few trading months. All things being equal, you need to be cautious with your position size and recognize that there are a lot of headwinds out there that could cause major issues. Make sure that you are not overly leveraged at any given moment, because of the potential problems that come with such a sensitive currency pair.

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