AUD/USD Forecast – Australian Dollar Rallies After PPI

AUD/USD Forecast Video for 15-01-2024

Australian Dollar vs US Dollar Technical Analysis

The Aussie dollar rallied rather nicely during the Friday session to slam into the same resistance that we have seen for some time. This was a direct reaction to the PPI numbers in the United States that came out cooler than anticipated, so therefore it does make a certain amount of sense that the US dollar has struggled.

That being said, we’ll have to wait to see whether or not we can close above the 0.6750 level, which is what it would take for me to get bullish again. As I record this, the market is a little wishy-washy about it, so we’ll have to wait and see whether or not there’s any follow-through. On a break above the 0.6750 level on a daily close, then it’s likely that the Aussie dollar will go looking toward the 0.68 level, and then possibly even the 0.69 level, which is the top of the overall consolidation area. You will have to pay a lot of attention to bond yields in America, because if they continue to fall, then that will weaken the US dollar in general.

On the other hand, if we turn around and fall from here, the 0.6650 level underneath is significant support. And of course, we also have the 50-day EMA in that area as well that could come into the picture to offer significant support also. I do expect a lot of noisy behavior in this area as it essentially is fair value being halfway between the two major levels of 0.69 and 0.65 which I think longer term traders are paying attention to. In other words, I would expect a lot of choppy noisy behavior.

Keep in mind that the Australian dollar is highly sensitive to global growth,  commodities, and of course, the US dollar, which is considered to be a safety currency. Those dynamics come and go, but at the end of the day the technical analysis suggests that there are plenty of buyers on dips at the moment, so you should keep that in the back of your mind. Volatility will be a major issue, but all things being equal I think you also have to keep in mind that the US dollar could start to pick up momentum due to geopolitical issues getting out of control as well.

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