AUD/USD Forecast – Australian Dollar Rallies Again

AUD/USD Forecast Video for 22-12-2023

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied significantly during the trading session on Thursday as it looks like it is ready to make its bigger move. The 0.69 level is still my target, but I also recognize that we have a situation where the liquidity is going to start to disappear, so I don’t know if we make the move quickly. However, sometimes a lack of liquidity can actually exacerbate these moves so the last thing you want to do is to get too aggressive one way or the other.

Position sizing will be crucial, but you also need to keep in mind that there’s only one way to trade this market at the moment, and that is almost certainly going to be to the upside. I think that given enough time, we have a situation where buyers will come in on each dip, and therefore I think you have to look at this as an opportunity to pick a “cheap Australian dollars” every time it pulls back. If we were to break down from here, the 0.67 level is the first support level, followed by the 200-Day EMA. Speaking of the 200-Day EMA, the 50-Day EMA is trying to break above there, kicking off the so-called “golden cross.” If that is something that occurs, a lot of times longer term traders will pay close attention to it. That being said, it’s typically a delete signal, so that will only be for the longer term traders.

Short-term pullbacks at this point in time will continue to be bought into, as we have plenty of traders out there willing to get long. Interest rates in the United States will continue to drift lower, as the Federal Reserve has moved its so-called “dot plot” to show signs of weakness. In general, this is a scenario where I think you have to look at it through the prism of finding value, recognizing that the 0.69 level is the destination, and will be a major resistance barrier. Whether or not we break above there is something that remains to be seen going forward. In the meantime, we are heading into those holiday trading sessions, meaning that things could get a little strange, but the trend seems to be ensconced in this pair.

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