AUD/USD Forecast: AUD Pulls Back from 0.73 Again

Christopher Lewis

In general, this is a market that has been selling off for a while, but we have not made a “lower low” yet again.

The Australian dollar initially tried to rally on Friday, just as we have seen several days in a row. However, on Friday we sold off again, suggesting that we are more than likely going to continue to see a lot of choppy behavior, and perhaps an attempt to break down below the 0.72 handle. The market continues to see the 0.72 level as a significant support level, but if we were to break down below there, it is likely that we will see this market fall apart.

Keep in mind that the market is very noisy, but it is also very sensitive to risk appetite coming out of places like China. The 50-day EMA is sitting just above, and it is going to offer quite a bit of resistance at the 0.7346 level, which is right in the center of the previous consolidation area. So, it makes sense that we would see a lot of selling pressure if we do take off to the upside as well.

This is a market that looks threatened, and it makes sense that the Aussie will be influenced by external factors such as China and the lockdowns that had ravaged the Australian economy. The market is noisy to say the least and will also be influenced by the US Dollar Index itself. As long as there is fear out there, the US dollar will continue to attract a certain amount of attention.

Looking at this chart, it is also worth noting that the US dollar has a certain amount of strength behind it, due to the fact that the interest rate in the United States is climbing, which makes the greenback a little bit more attractive than before. The candlesticks over the last 48 hours ended up forming an "inverted hammer”, so a breakdown is an even more bearish signal. In general, this is a market that has been selling off for a while, but we have not made a “lower low” yet again. If we turn around and break above the 200-day EMA, then it would change the overall trend, but it is almost impossible to suspect that that is going to happen anytime soon.

AUD/USD

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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