AUD forecast for 2024: Eyes on the RBA

Forecast for the Australian dollar: Bullish.

The Australian Dollar roared higher to close out the week, while the US Dollar slumped as Treasury yields across the curve plummeted.

The benchmark 10-year note dropped below 4.50% on Friday. It had been trading above 5.00% two weeks ago.

For the first time since late September, AUD/USD traded above 65 cents on Friday.

On the domestic front, the Reserve Bank of Australia (RBA) meets to discuss monetary policy on Tuesday. This is the day of the Melbourne Cup, a horse race that attracts global attention.

A hike, as telegraphed here more than 2 weeks ago, seems highly likely if recent comments from RBA officials are to be believed.

The Aussie Dollar may get an initial clean sweep from an RBA hike, but it seems that the global picture will still influence the exchange rate in the medium and long term.

AUD/USD TECHNICAL ANALYSIS

The AUD/USD rally has surged higher in the past week, as the pair has moved above its short- and medium-term 10, 21, 34, and 55-day simple moving averages (SMAs), possibly indicating that the short-term momentum is bullish for now.

The 100- and 200-day SMAs remain above the price, and both coincide with notable potential resistance zones near 0.6520 and 0.6620.

On the downside, support could come from a break at 0.6450 or the previous lows at 0.6285, 0.6270 and 0.6170. The latter may also find support at the 161.8% Fibonacci extension at 0.6186.

In the bigger picture, however, the pair remains in a descending channel and the longer-term bearish trend may remain intact for now.

AUD/USD DAILY CHART