AUD/USD Forecast – Australian Dollar Gives up Early Gain

AUD/USD Forecast Video for 10-01-2024

Australian Dollar vs US Dollar Technical Analysis

We have seen the Aussie initially try to rally during the day, only to give up the gains on Tuesday but this really shouldn’t be a huge surprise. After all, this is a market that has seen a lot of back and forth right now as we’re hanging around the 0.67 level. This is an area that continues to show its importance time and time again, so I think it’s worth paying close attention to it. The most important lesson will be that we are essentially stuck at this point, so I’m going to let the market tell me which direction it wants to break before putting any money to work here.

It is essentially at what I would call fair value. After all, this is a market that has been stuck between 0.65 at the bottom and 0.69 at the top. So being right in the middle makes it essentially a neutral pair. This makes a lot of sense due to the fact that the yields in America, although dropping, may be dropping for more of a risk aversion type of reason.

If that’s going to be the case, then the Australian dollar will take it on the chin as it is a commodity currency, and it’s also highly levered to Asia to begin with. We are essentially at the 50% Fibonacci retracement level if you choose to look at the upside, and therefore if we were to break out from here, a revisit of the 0.69 level would not be asking a lot. If we can break above that level, then I believe that the Australian dollar reaches the 0.70 level rather quickly.

On the downside, if we were to break down below the 0.65 level, there is a lot of support extending down to the 0.63 level, which probably would be the floor in the market. All things being equal, it looks like we’re trying to carve out a longer term range, and therefore, you have to treat this as a sideways market, at least until it can pick up some type of momentum.

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