AUD/USD Price Forecast – Australian Dollar at Inflection Point

The Australian dollar has gone back and forth during the course of the trading session on Friday as we continue to see the 0.7250 level will attract a little bit of attention, but quite frankly I think there is even more resistance near the 0.73 handle. That is an area that was previous support, so it should now be significant resistance. The market has been in a downtrend for a while, and now that we are finally going to see whether or not the Federal Reserve is going to start talking about tapering. Ultimately, that is the only thing that seems to matter to markets at the moment.

AUD/USD Video 30.08.21

That being said, we also have to pay close attention to China, and what is going on over there as the Australian economy is so highly levered to exporting commodities to that part of the world. We have seen economic numbers in that part of the world slump, and that of course is going to have detrimental effects on the commodity markets, as well as the Australian dollar in and of itself. The 0.70 level underneath was the support level that I thought we were going to test but failed to. After this most recent bounce, but maybe we are getting ready to do so finally?

If Jerome Powell does in fact start talking about tapering, then it will probably send more money towards the US dollar regardless. With this being the case, I think the Australian dollar will be extraordinarily sensitive to this due to the fact that the Australian economy is relatively shut down anyway.

For a look at all of today’s economic events, check out our economic calendar.