AUD/USD Forecast – Australian Dollar Sells Off

AUD/USD Forecast Video for 02-01-2024

Australian Dollar vs US Dollar Technical Analysis

As you can see, the Australian dollar has fallen pretty significantly against the US dollar during trading on Friday, but that should not be a huge surprise. We are a bit overextended at this point, and quite frankly, the end of the year dictates that people will need to take profit. The 0.69 level above is a significant barrier that I think a lot of people will struggle with. If we can get above there, then obviously the Australian dollar could take off, perhaps opening up the possibility of a move to the 0.70 level. That would take a lot of bullish pressure and a lot of risk on attitude.

Right now, I think you have a lot of people out there who have done quite well in the Australian dollar just simply trying to go home for the year and be able to show a huge gain. Underneath we have the 50-day EMA breaking above the 200-day EMA showing signs of the Golden Cross, which of course longer-term traders pay close attention to. All things being equal, I think that’s an indicator that is quite often late, but it does tend to attract a lot of attention by longer-term traders, which of course typically means big money.

Underneath, there is massive support at the 0.65 level, but that is light years away. I don’t necessarily think that we are going to get there anytime soon. In the short term, I think this is a situation where traders are going to look at pullbacks as potential buying opportunities. But the first week of January could be a bit of a mess as liquidity will still be an issue. The Australian dollar, of course, is highly levered to the commodity markets and of course the overall global growth situation so pay attention to those. Furthermore, pay close attention to the 10-year yield because the 10-year yield has a negative correlation to this pair as well as higher yields in the United States obviously make the US dollars stronger.

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