AUD/USD Forecast – Aussie Continues to Look For Support

AUD/USD Forecast Video for 06-02-2024

Australian Dollar vs US Dollar Technical Analysis

The Aussie dollar has broken down just a bit during the trading session on Friday, and it suggests to me that we are probably going to head towards the 0.6350 level. How long it takes to get there, I don’t know, but this has been a significant breach as we are now below the 0.65 level. Not decidedly so though, so I will probably wait until we get to the end of the session. And if we are still below there, then I’m probably going to start looking to sell this pair. 0.6350 is an area of considerable consolidation and bullish pressure, so that makes sense for a target.

On the upside, if we were to turn around and recapture 0.6550, then the Australian dollar could go looking to the 0.6650 level above which was the top of the previous consolidation region. All things being equal, the Aussie of course, will move on interest rate differential and what is the perceived move of the Federal Reserve. Furthermore, it is also highly sensitive to commodities, so you have to keep that in mind. And then after that, you also have to pay attention to the fact that the Australian economy is so highly levered to Asia.

The economic picture in China hasn’t been that hot, so it certainly is a little bit of a drag on the Aussie going forward. In general, I think this is a market that slowly drifts lower. I’m not looking for major rapid moves, but I think a general grind is probably what we have in store. I think that would be true to the upside as well. So in general, I don’t think momentum is something you’re going to see a lot of with the Aussie right now. It is a risk on currency, so you have to keep that in mind also. So, it could be a volatile couple of days, but it looks like the sellers are starting to take over. In this environment, it makes sense to be cautious, but the USD looks to be flexing its muscles yet again.

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