AUDUSD 2024 Technical Outlook Preview

This is an excerpt from our full AUD/USD 2024 Outlook report, one of nine detailed reports about what to expect in the coming year. Click the banner at the bottom to download the full report.

AUD/USD futures positioning: Room for more short covering, but where are the bulls?

Large speculators reached a record level of net-short exposure to Australian dollar futures in late September, and continued short-covering has allowed AUD/USD to rise against its bearish trend. However, like copper, bulls remain mostly sidelined as they doubt the RBA will hike further. This still leaves room for further upside should bears continue to cover, but until we see bulls step back to the table with conviction then upside targets need to remain realistic.

Source: Eikon

AUD/USD technical analysis (weekly chart):

The Australian dollar spent most of 2023 in a downtrend, having fallen over 12% from the February high to October low. In fact, it has effectively been on a downward path over the past three years, which means while it's a well-established trend, it's not a groundbreaking idea to short this market.

Source:TradingView

What if this year’s decline is part of a larger, bullish trend reversal?

A prominent V-bottom formed in 2020 which can often be found a significant turning points. The 2009 weekly and monthly close lows – which are historically significant as the mark the lows of the GFC – acted as support in 2022 and 2023, both of which are higher lows relative to the 2020 V-bottom low. Furthermore, the decline of the past three years has been less efficient than the rally that preceded it.

• 2020 low to 2021 high: +2500 pips in 49 weeks
• 2021 high to 2022 low: -1800 pips in 85 weeks (it took longer in time to travel less than the prior rally)

What are the major fundamental storylines for AUD/USD traders to watch next year? What about the impact of commodity prices and China's economic outlook? See our full guide to explore these themes and more!