AUD/USD Forecast – Aussie Dollar Continues to Probe Higher

AUD/USD Forecast Video for 19.12.23

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has rallied ever so slightly during the trading session on Monday, as it looks like we are trying to bypass the highs of the last couple of sessions. The 0.67 level is an area that could offer a little bit of resistance, but ultimately, I do think that we will go looking to the 0.69 level over the longer term. With that being said, I also like the idea of buying short-term pullbacks, because I do think that eventually buyers will step in to pick up “cheap Aussie dollars.”

Underneath, we have the 200-Day EMA sitting right around the 0.66 level, which should offer quite a bit of support. It’s also worth noting that the 50-Day EMA is racing toward that 200-Day EMA indicator, suggesting that we may get a “golden cross” relatively soon. With this, I think the market is likely to continue to see a lot of noisy behavior, but I do think that there are plenty of buyers underneath willing to get involved.

As the Federal Reserve has essentially given up to Wall Street, the US dollar will probably continue to drift lower as world traders continue to price in the idea of lower interest rates in America. It appears that the Federal Reserve thinks there will be 2 or 3 interest rate cuts in 2024, and that has weighed upon US dollar strength. However, we could get a little bit of a reprieve for the dollar if the trader suddenly started to worry about why the Federal Reserve sees the need to cut interest rates.

After all, if it ends up being a bit of a panic situation, the US dollar is normally the first place people go. It is considered to be the ultimate “safety currency”, so that is something that you need to keep in the back of your mind while the Australian dollar is on the other end of the spectrum, being highly correlated to commodities and global growth. Regardless, I think this is a situation where traders will continue to press to the upside in the short-term, but we also have to keep in mind that we are almost to the holidays, and liquidity could be an issue.

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