AUD/USD Forecast – Aussie Dollar Continues to Test Resistance

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied a little bit during the early hours on Wednesday, but it looks like we continue to struggle with the 0.69 level. The 0.69 level of course is an area that is a large, round, psychologically significant figure, but it is also an area that we have previously seen some noise at. Underneath we have the 0.6850 level and if we were to break down below that level, then the market could really start to drop in general.

This is a market that is going to be paying close attention to the Federal Reserve, which of course has recently cut interest rates by 50 basis points, but it also will focus on the idea of global growth, Asian growth specifically, due to the fact that Australia is so heavily intertwined with Asia. And then of course, the idea of risk appetite. As risk appetite fails, it will favor the US dollar in general. We could go plunging to the 50-day EMA, possibly even the 200-day EMA, which is now at the previously important 0.6650 level.

On the other hand, if we can break above 0.695, then it opens up 0.70, and probably more of a buy and hold situation after that. We have seen a nice rally higher, but when you look at the longer-term charts, we’re just hanging around the top of what you could consider a pretty significant sideways consolidation move that really started in February of 2023. So, we are in the process of trying to sort out if this was a bottoming pattern or if we’re going to slip right back into it.

There is a large cluster just above current trading, and I think that’s part of what’s causing issues as well. Furthermore, if we get a risk off move and that’s a very real possibility in this environment, that could send this pair plunging. So regardless, keep your position size reasonable.

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