AUD/USD Forecast – Aussie Dollar Pulls Back a Bit

AUD/USD Forecast Video for 16-01-2024

Australian Dollar vs US Dollar Technical Analysis

The Aussie dollar rallied just a bit during the trading session on Monday, only to turn around and fall apart. So, at this point, it looks like we continue to see a lot of negativity, and therefore, I think you have a situation where we could very well break down, but we do have some support underneath that we have to pay close attention to. So, the 50 day EMA just underneath is going to continue to be a support barrier and underneath there we have the 200 day EMA as well.

If we break through all of that, then the 0.65 level is an area that I think a lot of people could find buyers. That is previous resistance, so a certain amount of market memory comes into the picture. On the other hand, if we turn around and break above the 0.6750 level, then we could go looking to the 0.6850 level and then maybe even the 0.69 level. All things being equal, this is a market that is going to continue to move towards one side or the other based on interest rates in America and of course, the whole idea of risk appetite.

The Aussie is very sensitive to risk appetite, as you know, being both a commodity currency and one that is highly levered to Asia. With this, I recognize that we are essentially in the middle of a larger consolidation area between 0.65 and 0.69, and therefore close to what you could probably suggest is fair value. In other words, why would you get bothered putting a lot of money into this pair at the moment when there will be better setups coming down the road?

At this point in time, I think I would suggest using the AUD/USD pair as a risk barometer indicator, maybe not anything more than that. That being said, once we get to the outer edges of this trading range, then we will have to look for potential setups. However, right now it just doesn’t look like we are ready to make any big moves.

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