AUD/USD Forecast – Australian Dollar Sells Off

AUD/USD Forecast Video for 01.11.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar sold off rather hard during the early hours on Tuesday, as we continue to see a lot of negativity. Ultimately, the market looks as if the 0.64 level will continue to be massive resistance, and of course the top of the downtrend channel that we have been in comes into the picture as well. Furthermore, the 50-Day EMA is hanging around the top of the channel, so all things being equal I think there is quite a bit of downward pressure from a technical analysis standpoint.

If we were to turn around and take off to break above the 0.64 level, that would obviously be a very bullish sign, perhaps sending the market to the 0.65 level. The 200-Day EMA is sitting just below the 0.66 level and dropping quite drastically.

Underneath, the 0.62 level is a massive support level, and I think it is going to be difficult to break through. Short-term rallies do get sold into from what I can tell, which makes quite a bit of sense considering that the level had previously been important multiple times. If we were to break down below there, the market is likely to go down to the 0.60 level. The 0.60 level of course is a large, round, psychologically significant figure that a lot of people will be paying attention to.

Keep in mind that the Australian dollar is highly sensitive to global economic factors, as it is essentially based on commodities more than anything else. It is also highly exposed to the Chinese economy, which continues to report dismal economic numbers. The volatility that we have seen in this market makes quite a bit of sense, not only due to those factors, but the geopolitical issues that continue to plague the headlines. If the market is trying to react to headlines coming out of the Middle East and various other places, it does make quite a bit of sense that the US dollar continues to attract attention. Furthermore, the high interest rates in the United States also continue to favor the greenback more than anything else when it comes to the Forex markets.

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