AUDUSD Forecast – Australian Dollar Continues to Struggle Near 0.71

AUDUSD Forecast Video for 31.01.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has initially tried to rally during the trading session on Monday but gave back gains rather quickly. It looks like we are going to continue to see the 0.71 area offers certain amount of resistance, which does make sense if you look to the left. The market had a major peak in summer of last year right at this level, and now we are trying to figure out whether or not we can continue to go above it.

With the Federal Reserve meeting on Wednesday, is very likely that things will be somewhat quiet between now and then. What the expectations are seems to be that the Federal Reserve is only going to hike 25 basis points. Furthermore, there’s a lot of expectations that they will start to talk about slowing down the rate of hikes. If they do not, this market will probably start falling rather rapidly.

If we can take out the 0.7150 level, then it’s very likely that the Aussie will continue to climb against the greenback. A lot of this would come down to growth, or for that matter, a lack of growth around the world. Keep in mind that the Australian dollar is highly correlated to the Chinese mainland, and of course global growth in general.

As things stand right now, global growth seems somewhat uncertain, so that could be part of what’s happening here as well. Either way, it looks like we are in a bit of a waiting pattern between now and the Federal Reserve meeting and press conference afterward. Because of this, I’m fairly neutral on this pair for the next couple of days but do recognize we are a bit overstretched.

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