AUD/USD Forecast – Australian Dollar Continues to Consolidate

AUD/USD Forecast Video for 23-01-2024

Australian Dollar vs US Dollar Technical Analysis

The Aussie dollar has had a somewhat uneventful day so far. We did initially try to rally but we’ve given back that rally, which makes a certain amount of sense considering that we just don’t have any economic announcements coming out during the day of any consequence. And if that’s going to be the case, then markets are probably going to be quiet in general. You have to keep in mind that the Australian dollar is very sensitive to the overall global growth story, China, Asia in general, and, of course, the interest rate differential because the Federal Reserve remains front and center when it comes to most trading.

While most pundits believe that the Federal Reserve is, in fact, going to be cutting during 2024, you also have to ask the question as to whether or not other central banks will. After all, the economy does seem to be slowing down a bit and that will continue to be a major factor for traders out there when it comes to assessing risk appetite, where they want to put their positions, etcetera. When it comes down to it, the Aussie will continue to be noisy as a result of the uncertainty out there in the world. The AUD/USD can often then be thought of as a barometer of risk appetite in general.

The Aussie dollar has a significant amount of support underneath it at the 0.65 level, which I consider to be the floor in the market in the short term. On the upside, if we can take out the 50 day EMA, then it’s very possible that we could return to the 0.67 level, an area that had been equilibrium for some time as the larger consolidation area stretches from the aforementioned 0.65 level underneath, all the way up to the 0.69 level above. All things being equal, I do think that we’re probably more likely to see the Australian dollar bounce from here, but I don’t know that it changes the overall trajectory of the pair longer term.

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