AUD/USD Forecast – Australian Dollar Pulls Back to Kick Off The New Year

AUD/USD Forecast Video for 03-01-2024

Australian Dollar vs US Dollar Technical Analysis

Taking a look at the Aussie dollar, we initially did try to rally during the trading session on Tuesday but have plunged since then. With that being the case, I think we have gotten a bit overstretched, and a little bit of correction makes a certain amount of sense. Now, do I think we’re going to break down drastically? Not necessarily. I just think that a certain amount of profit taking needs to occur as we are close to the overall range that the market seems to be trying to carve out. The 0.69 level above is a major barrier and we have in fact failed to reach above there but with the market being so overextended that should not be much of a surprise. A pullback to the 0.67 level I think does make a certain amount of sense, possibly even 0.66.

Longer term traders will be paying close attention to the 50 day EMA breaking above the 200 day EMA because it forms the so-called Golden Cross. An indication that typically is rather late but can lead to months upon months of trend following action if we truly take off to the upside. The Federal Reserve is expected to cut rates in the year 2024 so that’ll be interesting to see if the market still tries to price that in because there has been a lot of chatter coming out of Federal Reserve governors since then that seem to be trying to walk back that sentiment.

Either way, the market got a little overextended, so a pullback makes a certain amount of sense, and I think that’s just essentially what we’re seeing here. Whether or not you choose to go short is entirely up to you but recognize the fact that there is a lot of momentum underneath. So, the selling pressure is probably short-lived, and on top of that, you have to pay close attention because Friday is the jobs number. With that being the case, a certain amount of caution is probably warranted at this point in time.

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