AUD/USD Forecast – Australian Dollar Continues to Test Support

AUD/USD Forecast Video for 19-01-2024

Australian Dollar vs US Dollar Technical Analysis

The Aussie dollar has found itself to be rather choppy during the early hours on Thursday, which at this point in time is not much of a surprise, considering we are so close to a major support level. That support level, the 0.65 level, I think continues to attract a lot of value hunters, as it has been important multiple times in the past. “Market memory” could come into the picture right now to bring buyers back in and try to send this pair higher. That doesn’t mean that it will be easy, but it does suggest that the area underneath is going to continue to be crucial.

The question now, of course, is whether or not this is the bottom of the overall range that we are in, or if it is just an area that the sellers will eventually overcome. If we turn around and show signs of strength, there is a barrier in the form of the 200-day EMA above and then again at the 0.67 level, which is right in the middle of what I think is the longer term range of 0.65 and 0.69. When you’re in the middle, you’re essentially in fair value and therefore there’s no compelling reason to be long or short. I think this year is set up to be one that is somewhat range bound in general, and the Aussie dollar will probably follow that pattern as well.

Nonetheless, you don’t want to get too big in your position if you are looking for value down here because if we break the 0.65 level, we could drop down to the 0.6350 level rather quickly. Expect choppy and noisy behavior as the market is trying to sort out what it wants to do with itself from a risk appetite perspective. Remember, the Aussie dollar is highly levered to risk appetite, global growth, commodities, Asia, and things like that, so there are a lot of moving pieces at any given moment. This is probably more about the US dollar than the Aussie at the moment though, so pay attention to those yields in America.

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