Comprehensive AUD/USD Analysis for December 7, 2023

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the AUD/USD for 7th December 2023. 

AUD/USD Key Takeaways 

• RBA will not raise interest rates: The Reserve Bank of Australia did not raise interest rates as expected, but at the same time it also gave up its extremely hawkish statement. This signals RBA seems to have decided to end the interest rate hike cycle. Therefore, the next focus will be on inflation data to see if there is any basis for interest rate cuts. 
• The interest rate differential drives AUD/USD: The current expectation that the Federal Reserve will cut interest rates by 200 basis points by the end of 2025 seems too aggressive. In contrast, the expectation that the Reserve Bank of Australia will cut interest rates by 50 basis points by the end of 2025 is very moderate. This makes the Australian dollar against the US dollar more favored by the market in the long run. 

AUD/USD Technical Analysis 

AUD/USD Daily Chart Insights

• Stochastic Oscillator: The indicator started to fall rapidly after sending a short signal in the overbought area, suggesting that the short forces in the current exchange rate have the upper hand. 
• Price Action: The pin bar yesterday suggested that the upward breakthrough failed and the bulls’ power is temporarily insufficient. If the exchange rate falls below yesterday’s low, focus on short trading opportunities. 
• Support level: The lower 65-day moving average and the 50% Fibonacci retracement level of the previous upward trend form a joint support area, so the first target below is near this support price. 

AUD/USD 1-hour Chart Analysis

• Stochastic oscillator: The indicator has entered the oversold range. Short-term bears may be overcrowded. Wait for the indicator to leave this area and send out a short signal again before paying attention to entry opportunities. 
• Fibonacci extension level: Based on the downward trend since December 4, the exchange rate’s first target level for another downward trend after stepping back the neckline is looking towards the 61.8% Fibonacci extension level. 
• Price Action: The exchange rate has clearly formed an M-top pattern, and the red neckline position was tested as effective resistance. Therefore, before the market price completely breaks through the neckline, focus on short-selling opportunities. 

Ultima Markets MT4 Pivot Indicator

• According to the pivot indicator in Ultima Markets MT4, the central price of the day is established at 0.65635, 
• Bullish Scenario: Bullish sentiment prevails above 0.65635, first target 0.65826, second target 0.66162; 
• Bearish Outlook: In a bearish scenario below 0.65635, first target 0.65296, second target 0.65100. 

Conclusion

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