AUD/USD Forecast – Aussie Dollar Has a Wild Friday

AUD/USD Forecast Video for 08-01-2024

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar initially plunged during trading on Friday, but we have since seen a bit of a resurgence. It looks as if traders are done selling and they may have finally found a bit of support, which is interesting considering that the jobs number and employment numbers overall in the United States were stronger than anticipated.

Traders seem to be focusing more on the Federal Reserve than anything else and believe wholeheartedly that the Federal Reserve is going to cut rates multiple times this year. With that being the case, it has put quite a bit of pressure on the US dollar, at least until recently, and now it looks like we may be getting ready to try to resume the overall trend of shorting the greenback. At this point, it looks like we are just going to be all over the place.

The Australian dollar needs a strong economy globally because it is so highly levered to not only Asia, but commodity markets in general. As long as it looks like the Federal Reserve is going to liquefy the overall global economy, it does make a certain amount of sense that the Aussie might be a beneficiary. Whether or not we truly take off from here remains to be seen, but I think at the very least it would not be overly surprising for the Australian dollar to go looking to the 0.6850 level again, maybe even the 0.69 level, which is where I see major resistance and perhaps the top of the overall consolidation zone.

A breakdown below the 50-day EMA and the 200-day EMA both would open up a move down to the 0.65 level, an area that I think offers significant support. It had previously been significant resistance, so one would have to believe that there’s a certain amount of market memory to be found in that region. At this juncture, it looks like the Aussie is trying to save itself, and will eventually try to reach the highs again, all things being equal. It is interesting that the initial sell-off has been turned around so rapidly.

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