AUD/USD Forecast 23/10: Aussie Buyers Return (Video)

(MENAFN- Daily Forex) The Australian dollar continues to see buyers on dips, as we are looking at a larger range playing out yet again. The bounce on Thursday is a continuation of what we have seen for the last year.

AUD/USD

The Aussie dollar has gone back and forth during the course of trading on Thursday as we continue to squeeze between the 200-day EMA and the 50-day EMA indicators. At this point, if we can break above the 50-day EMA, then I think that the Aussie has a better shot of rallying.

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It is worth noting that interest rates in America are dropping, but RBA expectations of an interest rate hike are all but nil at this point for the next meeting. With that being said, I think you have a situation here where we are probably just going to continue looking at this through the prism of consolidation. Ironically, though, we are at an oversold condition, so a little bit of a pullback could show up.

This is a buy-the-dip type of scenario

This is a buy-the-dip type of scenario unless, of course, U.S. rates start to spike again. If they continue to sell off, then that should eventually give the Aussie dollar a little bit of momentum, or perhaps simply put the U.S. dollar in a position of lacking strength

Now, that being said, Australia is highly levered to China, which is barely growing at this point, so keep that in mind. But if things remain the same, then a bounce from here does make quite a bit of sense.

EURUSD Chart by TradingView

We are watching the situation in the Middle East, so it looks like tensions are picking back up again, with U.S. diplomats being pulled out of Saudi Arabia. We will see how this plays out, but ultimately, this is a market where I do think there is a lot of demand just below. A little bit of a pullback probably attracts value hunters.

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