AUD/USD Forecast – Australian Dollar Continues to Dip Daily

Christopher Lewis
Published: Jan 31, 2024, 14:33 UTC

The Australian dollar has dipped multiple times against the US dollar over the last several weeks, and we did so again during the early hours of Wednesday.

Australian dollars, FX Empire

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AUD/USD Forecast Video for 01-02-2024

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has pulled back just a bit during the trading session. But at this point, it’s likely that short-term pullbacks will continue to look at the 0.65 level underneath as a major support level. With this being the case, 0.65, I think, is your short-term floor. That being said, it’s worth noting that we have seen a lot of action in this area previously, so it does make quite a bit of sense that the area continues to attract a lot of attention.

If we break down below the 0.65 level, then it opens up a much deeper correction down to 0.6350 and would probably be accompanied by a huge move higher in the US dollar overall. That being said, I think you’ve got a scenario where it’s probably going to be easier to break higher, and Jerome Powell could be a major catalyst for that. If the FOMC seems very loose with its monetary policy here in 2024, then it’s likely that we could take off to the upside. However, if they get aggressive, that changes the overall outlook.

The market is closer to the bottom than the top, and therefore, it makes sense that we could just kind of drift higher as a result. This is a market that I think trades in this general vicinity, probably the majority of the year. Remember that if we start to see the Federal Reserve cut rates, it will probably work against the dollar for a while.

But the reality is that if they start to get aggressive, that will be bad for other currencies because it means that the global economy is slowing down. And that obviously would cause major problems for the Australian dollar itself. Expect choppiness, volatility, and a lot of noisiness, but at the end of the day, I think we’re closer to the bottom than the top.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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