AUD/USD extends its reversal below 0.6800 as the US Dollar trims losses

• The extends its corrective reversal and explores levels below 0.6800.
• Hopes of Fed cutts in 2024 are keeping US Dollar bulls in check.
• AUD/USD is set to end the year practically unchanged.

The Australian Dollar is on a corrective reversal from multi-month highs at 0.6870, reaching intra-day lows right below 0.6800 as the US Dollar pares previous days’ losses in a light trading session.

The pair is on track to end the year practically unchanged as the last two months’s rally has contributed to erasing losses after a sharp decline in the first half of the year.

The US Dollar is regaining lost ground on the last trading day of the year, although yet with market speculation of Fed cuts in 2024 is likely to limit gains.

In the calendar today, the Chicago PMI is expected to confirm the softer economic outlook suggested by the higher-than-expected jobless claims and the stalling home sales seen on Thursday.

From a broader perspective, the bias remains positive, with the current reversal seen as a correction from overbought levels. Immediate support lies at 0.6780 and below here, 0.6720. On the upside, resistances are at 0.6845 and 0.6870.

Technical levels to watch