The AUDUSD pair appears weak, but there are signals for recovery

The AUDUSD pair declined to 0.6223, and recovering from the two-year low will not be easy. Find out more in our analysis for 20 December 2024.

AUDUSD forecast: key trading points

• The AUDUSD pair remains at a two-year low
• The market is confident that the RBA is closer to an interest rate cut, which could happen as early as February 2025
• AUDUSD forecast for 20 December 2024: 0.6239 and 0.6288

Fundamental analysis

The AUDUSD rate fell to 0.6223 on Friday. The pair remains at a two-year low and appears relatively weak from a fundamental perspective.

The market believes the Reserve Bank of Australia will soon be ready for its first rate cut amid slowing economic activity. The rate could be lowered as early as February 2025, with the current level at 4.35% per annum. The minutes of the RBA’s previous meeting, due in December, may provide further insights into these plans.

Externally, the AUD remains under pressure from the strong US dollar. This driver became more influential after the Federal Reserve announced its cautious plans to lower the interest rate next year.

The AUDUSD forecast appears moderately negative.

AUDUSD technical analysis

The AUDUSD H4 chart shows that local conditions for a further decline to the target of 0.6194 remain. The market could easily recover from this level, bouncing back to 0.6239. If this rebound succeeds, the subsequent growth target will be 0.6288.

Today, 20 December 2024, the price might rebound to 0.6239 following a short-term deterioration.

Summary

The AUDUSD pair plummeted to another two-year low, influenced by the US dollar and expectations of RBA monetary policy easing. From a technical perspective, today’s AUDUSD forecast suggests a potential short-term rebound to the 0.6239 level.