AUD/USD Forecast – Australian Dollar Continues to Reach Higher

AUD/USD Forecast Video for 20.12.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied again during the trading session on Tuesday, as we have broken the highs of the previous couple of candlesticks. By doing so, it looks like we are going to go higher, perhaps reaching toward the 0.69 level, an area that previously had been significant resistance and it could be the top of the overall consolidation area that we are hanging around. Short-term pullbacks at this point should continue to see buyers based on value, and the Federal Reserve now looks likely to cut interest rates in 2024, despite the fact that some members have been trying to walk back that expectation.

Underneath, we have the 50-Day EMA trying to reach higher and break above the 200-Day EMA, kicking off the golden cross, a signal that a lot of longer-term traders pay close attention to as it is considered to be a very bullish signal. Short-term pullbacks continue to offer buying opportunities, but I do think that given enough time we can go higher. All things being equal, the 0.69 level has been important more than once, so whether or not we break through there easily remains to be seen but I do think that given enough time we probably have a situation where the markets will at least threaten to do that.

Short-term pullbacks continue to offer buying opportunities as long as we look at the Federal Reserve cutting rates, as it drives down demand for US dollars. However, longer term we have to ask questions about the global economy, as the Australian dollar is still highly levered to not only the global economy but also commodity markets. The biggest thing of course is to pay attention to bond yields in America, because if they continue to drop, it’s very likely that we will see the US dollar continue to show signs of weakness in favor of not only the Australian dollar but other currencies around the world. With this, it’s a situation where we continue to see this market try to grind higher, but you also have to worry about the lack of liquidity that accompanies markets this time of year.

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