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AUD/USD Forecast: Aussie Wipes out the Gains

It certainly looks as if the buyers are struggling to hang on to gains at this point.

The Australian dollar has fallen hard during the trading session on Thursday to wipe out the gains from the Wednesday session. This shows just how negative things are, and in short order when it comes to the Aussie. Because of this, it is likely that we are going to test the 50 Day EMA, and then perhaps even the 200 Day EMA. Keep in mind that the area between the 50 Day EMA and the 200 Day EMA typically suggests that there is going to be a lot of noise in that area.

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It is because of this that if we break down below the 200 Day EMA, the Australian dollar will almost certainly break down rather significantly. At that point, I would anticipate that the Australian dollar goes looking to reach the 0.72 handle, and then perhaps even down to the 0.70 level. This is a market that I think continues to see a lot of noise at various levels, but it certainly looks as if the Australian dollar is going to continue to cause some issues. Ultimately, I do think that the market will continue to see plenty of buyers on these pullbacks, but whether or not they can sustain the rally is a completely different situation. After all, the US dollar has attracted a lot of inflows, especially as interest rates in the United States continue to climb.

When you look at this chart, you can see that the 0.75 level above has been massive resistance, and I think it extends to the 0.76 level. In other words, we need to wipe out a lot of real estate just above in order to go higher. The market continues to see a lot of volatility going forward regardless, but the most important thing they need to pay attention to is the fact that there is a lot of uncertainty regardless. Because of this, I think this favors the US dollar, not only due to those interest rates but the fact that when there is uncertainty, people do things like buy bonds. In the short term, I would not be surprised at all to see a lot of back and forth, but it certainly looks as if the buyers are struggling to hang on to gains at this point.

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