AUD/USD Forecast: Touches the 200-Day EMA – 07 February 2023

The Australian dollar has to worry about the Chinese economy, and of course, whether or not there is global growth. With all of the emphasis put on commodities in Australia, the currency then becomes a bit of a proxy for gold, copper, and other such exports. If the rest of the world is slowing down, then the demand for all those factors will certainly have quite a bit of negativity for the Aussie. The fact that we bounced from the 200-Day EMA slightly is at least an encouraging sign, but if we give that level up, it’s likely that the market will go looking to the 0.67 level given enough time. After all, we have been a bit overdone to the upside, but we certainly have been overdone to the downside in the last couple of days. It is because of this that I believe it would not be much to imagine that the market may bounce a bit, and then find sellers yet again.

Anything that gets below the 0.67 level opens up the possibility of a move down to the 0.63 level. If we start to see a lot of bullish pressure, then we would need to see a clearance of the recent hi, just below the 0.72 regions, to really get bullish. At this point, I think it’s more likely than not that we would see a little bit of a bounce that shows signs of exhaustion, and then we start to drop precipitously.

There are plenty of negative factors out there that could come into the picture regardless, so I just don’t see being positive of the Aussie anytime soon. You can make an argument that we are still technically in an uptrend, but you can just as easily make an argument that we just formed a massive “double top.” Regardless, this is a market that is set up for even more volatility.