AUD/USD Price Forecast – Aussie Dollar Testing Bottom of Consolidation

The Australian dollar fell during the trading session on Monday as there was more of a “risk off attitude” around the world, meaning that the US dollar got a bit of a bid. Furthermore, the Australian dollar is highly levered to commodities, and they of course got whacked. In that scenario, it does make sense that we go lower but we are trying to stabilize a bit. If we can break down below the Monday candlestick, then I think is likely that we go looking towards the 0.70 level underneath where we had seen a massive bounce.

AUD/USD Video 21.12.21

To the upside, the 0.72 level looks to be resistive, so if we can break above there that would be a very good sign, but right now I just do not see that happening. More likely than not, we will probably see this market go back and forth and in a sideways move, as we try to figure out what happens next. Liquidity of course is going to be very thin over the next couple of weeks, so I think range bound trading does make a certain amount of sense. That being said, be cautious with your position size because we may get a sudden spike in one direction or the other as the liquidity becomes much thinner.

For what it is worth, a lot of the choppy behavior would be expected and therefore I think if you can look at this market through the prism of a short-term back-and-forth type of range bound system, that is probably where you are going to make most of your money. As far as a bigger move is concerned, it may be possible but right now it certainly looks as if the market is content in this area.

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