- Taking a look at the Australian dollar, you can see that we have gone back and forth during the trading session on Thursday as the 0.65 level underneath continues to be crucial support.
- I think this level is something that a lot of people will be paying attention to and, as a result, I think we continue to look at this as a buy on the dip scenario, although I don't necessarily think that we are suddenly going to shoot straight up in the air.
I think the AUD/USD market is going to be noisy going forward, and that does make a certain amount of sense considering that the Australian dollar is so highly levered to risk appetite, commodities, Asia, and just global growth in general. The 200 day EMA sits just above and if we can break beyond that to the upside, then the 0.67 level above would be an area that I think could offer a little bit of a magnet for price. It's essentially in the middle of the overall consolidation range between 0.65 at the bottom and 0.69 on the top, which I think will probably be where we spend most of the time this year.
Having said that, if we were to break down below the 0.65 level, then it's likely that we could drop to the 0.635 zero level after that. Regardless, this is a pair that I think is a little oversold in the short term, so I do expect a short term bounce. Whether or not that sticks is a completely different question, and I just don't think that it does. So, with that, I remain relatively neutral, but bullish in the very short term when it comes to this pair.
In Review
I believe that the Australian dollar is going to continue to be very noisy, but I think that is going to be the case with most currency pairs in 2024. We are most certainly in a state of flux when it comes to not only the Aussie, but multiple other ones around the world. With that, you need to be cautious, but it does look like we are getting close to the significant bottom that the Australian dollar has defended so many times in the past. I’m expecting a short-term bounce, not necessarily something that is trend changing.
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