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AUD/USD Forecast: AUD Continues to See a Lot of Choppiness

Looking at this chart, it seems like we are in a bit of a down trending channel, continuing to show signs of negativity.

The Australian dollar has gone back and forth during the trading session on Thursday as we have tested the 0.67 level. That’s an area that has caused a lot of noise due to psychology, and the fact that the entire world seems to be lost without a clue at this point. Ultimately, the market could rally at this point, but I think that’s going to be a nice shorting opportunity as we continue to look for “cheap dollars.”

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The 0.68 level would more likely than not continue to cause resistance, and then of course you would have the 0.69 level. That being said, I think it’s only a matter of time before the sellers come in and punish the Aussie. After all, the rest of the world is looking very likely to go into recession, despite what may happen in Australia. Quite friendly, the Australian economy is held hostage by what happens in China, and the Chinese are yet again talking about locking people down. That is not going to be a very positive sign for global growth in general, therefore you need to not only pay attention to growth, but at this point, we also have to pay close attention to the US dollar in general.

The US dollar of course has strengthened quite a bit due to interest rates rising in the United States and the fact that people are concerned about whether or not liquidity is going to be an issue. When liquidity becomes an issue, it is the US dollar everybody runs two. Ultimately, I think that this market will continue to go lower, and I continue to fade rallies. However, the action on Thursday certainly continues to throw a lot of noise in the mix, and I just don’t see that changing anytime soon. In fact, it’s not until the break above the 50 Day EMA that I would consider going long, and even then, I would probably need to see quite a few changes when it comes to the fundamental analysis. The Federal Reserve continues to be a major player in what happens in the currency markets, and at this point, it is still the US dollar that everybody wants to own. Looking at this chart, it seems like we are in a bit of a down trending channel, continuing to show signs of negativity.

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