AUD/USD Forecast: Continues to Grind Back and Forth

Speaking of the rest of the year, we also have liquidity issues to worry about, so I’m not worried about being too big right now. AUD/USD is slightly higher during Thursday’s trade as we see it continue to consolidate. Remember that the Australian dollar is very sensitive to risk appetite and therefore has many externalities. Aussie is currently stuck at the bottom of the 50 day EMA and the top of the 200 day EMA. Advertisement Do you have a place to try? Don’t wait! Trade AUD/USD Now With these two indicators widely followed, it should come as no surprise that the market really doesn’t know what to do right now. We may see a lot of back and forth over the next few days, but it’s worth noting that the CPI release goes on sale on Friday, which could make the program a bit of a monkey wrench. However, when we see the market trading between these two indicators, quite often we end up seeing significant volatility that triggers a much larger move. I think that is what the Aussie is trying to do given the potential resistance above 0.69. Liquidity is a big problem. A lot of that is also coming into commodities, but you have to note that metals are doing relatively well, so that helps Australia. Also, if China does indeed reopen, it should be good for the Australian dollar as China is by far the largest export market for Australians. Regardless, there’s a lot of fear out there, so don’t be surprised if we see problems in the future. I think you should at least look at it through the prism of a market that could be a little bloated and noisy between now and the end of the year. Speaking of the end of the year, we also have liquidity issues to worry about, so that’s why I’m not worried about a very large position right now. Coming from next week’s FOMC meeting and the following day’s ECB meeting, it is hard to imagine what would change the markets other than unexpected news. Liquidity will be a big issue, so we may have some volatility, but at the end of the year I usually try to stay away from large positions.

James Rogers

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