AUD/USD Forecast: Bounces Hard During the Session on Wednesday

• During Wednesday's trading session, the AUD/USD initially pulled back to the 0.67 level, an area that has seen support a few times in the past.
• However, the market is still in a noisy area that was previously experienced.
• As traders worry about tightening monetary policy issues in the United States, the US dollar has been strengthening, leading to a significant sell-off of the Australian dollar.

Looking at the chart, the 0.67 level has now become a "hard edge," as multiple candlesticks have stopped at this level. This is very bullish in the short term, but there is also a significant amount of resistance above in the Aussie dollar that could come into play, making caution necessary. Traders will be looking for signs of exhaustion to begin selling again, as the market has to contend with the fact that China is reopening, but its economy doesn't seem to be gaining momentum. Tight monetary policy conditions around the world will further slow down the global economy, which will negatively impact Australia. As a major exporter of commodities, the Australian economy is highly sensitive to external economic conditions.

We Will Continue to See Negativity in the Short Term

While inflation in Australia is higher than anticipated due to the announcement earlier in the day, it is likely that we will continue to see negativity in the short term. Therefore, any short-term rally in the Australian dollar is something that some traders will be looking to fade due to the fact that it needs global growth and risk appetite to continue going higher. In the short term, it does have momentum, but momentum is not necessarily going to be enough to change the overall attitude of the market. Remember, volatility continues to be a major issue in not only the Australian dollar but almost all other currency pairs.

Near the 50-Day EMA and the 200-Day EMA indicators, there will be many sellers near the 0.69 level. As such, if there is any rally at this point in time, traders will want to see signs of exhaustion to begin shorting. Alternatively, if the market breaks down below the 0.67 level, it's probable that we could go down to the 0.66 level, and anything underneath that could open up the possibility of a move down to the 0.64 level. Overall, it is likely that the US dollar will continue to find buyers over the longer term.