AUD/USD Forecast – Australian Dollar Stabilizes for Second Day

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has gone back and forth during the course of the trading session on Thursday in the early hours as we are trying to determine where to go next. We also had a somewhat neutral candlestick during the Wednesday session, so it looks like we are trying to stabilize. At this point in time, we have to determine whether or not the 50-day EMA will continue to offer support just below, as it has at least so far.

The nasty candlestick from Tuesday so hasn’t been overcome, and at this point in time, it’s possible that we could be looking at this as a sideways market just waiting for it to happen. That would not be a huge surprise considering how the Australian dollar has behaved over the last year and a half or so. The 0.6650 level underneath is a massive support level and if we were to break down below there, then the market is likely to go look into the 0.65 level. On the other hand, if we were to turn around and break higher, the 0.680 level would be an area that I think a lot of people would be looking at as a potential ceiling in the market.

In general, this is a situation where traders are going to continue to look at this through the prism of risk appetite and of course Asian growth or lack of. Keep in mind Australia is highly sensitive to Asia and growth globally due to the fact that it has a major commodity sector. So, all things are tied together. If we get more risk on, then the Aussie rallies. If we get more risk off overall, then the dollar rallies.

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