AUD/USD Forecast: The Australian Dollar Faces Challenges – 23 March 2023
It is advisable to avoid being long in this market, as the challenges facing the Australian dollar make it an unappealing prospect.
This resistance at the 0.68 level is further reinforced by the 50-Day EMA, which should be taken into account by investors. Even if the Australian dollar manages to break above this level, the upside is expected to be limited due to the numerous challenges it will face. Consequently, the market will remain noisy, and it is anticipated that sellers will enter the market later on. This is understandable, given the close relationship between the Australian dollar and the global commodity market, which in turn is connected to the global growth situation.
Currently, the market is expected to continue witnessing fluctuations and volatility, implying that the Australian dollar could face difficulties as a result of US dollar strength. This may be exacerbated by the FOMC meeting, which is likely to announce another rate hike. Market participants will closely monitor the statement and press conference for any indications of a hawkish stance from Jerome Powell. If this proves to be the case, the Australian dollar may suffer significantly as concerns about a global recession rise, an environment that would be detrimental to the Aussie currency.
Additionally, the Australian dollar has been in a downtrend for some time, making it interesting to observe whether this trend will persist. A case can be made for the presence of a rising wedge at the moment, which is typically viewed as a bearish candlestick pattern. Regardless, it is advisable to avoid being long in this market, as the challenges facing the Australian dollar make it an unappealing prospect.
Ultimately, the Australian dollar is facing multiple challenges as it confronts resistance at the 0.68 level, while the upcoming FOMC meeting and potential interest rate hikes add to the uncertainty. Investors should monitor these developments closely and consider seeking alternative currencies for selling the US dollar against. As the market remains volatile, it is essential for participants to keep an eye on the evolving landscape and make informed decisions accordingly.
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