AUD/USD Forecast – Aussie Continues to Look For Bottom

AUD/USD Forecast Video for 05-02-2024

Australian Dollar vs US Dollar Technical Analysis

The Aussie dollar initially tried to rally during the day on Friday, then just got absolutely decimated as the jobs number came out much hotter than anticipated. And I think you’ve got a situation where we are going to try to test the 0.65 level, which has been significant support for some time. But I also recognize that if we break down below there, we could drop down to the 0.6350 level. This reference is a swing low that has shown significant support, so it does make a certain amount of sense that if we get down there, there should be plenty of buyers. On the upside, the top of the short-term consolidation range, from what I can see, is closer to the 0.6650 level, and a break above that almost certainly will send this market much higher, perhaps to the 0.67 level.

All things being equal, I think this is a pair that continues to focus mainly on the Federal Reserve and whether or not it’s going to cut rates. But with that jobs number on Friday coming out double what was anticipated, I think that has a lot of people questioning pretty much everything they thought. Nonetheless, the Australian dollar also gets a boost from commodities and global growth. So on the flip side of that equation, you can say that a strong US labor market might actually help the Aussie in the long run.

I think these competing factors will continue to keep this market somewhat sideways overall, but obviously we need to test the downside again, as we had done on Thursday. Again, 0.65 for me is important because it opens up 150 pips to the downside, while a break above 0.6650 could open up a hundred pips to the upside. In the meantime, I think we just bounce around and show signs of indecision as per usual. I think this is going to be the theme for most of the year, as there are a lot of moving pieces at the same time.

For a look at all of today’s economic events, check out our economic calendar.