AUD/USD Price Forecast – Australian Dollar Bounces From 50 Day EMA

The Australian dollar has bounced a bit during the trading session on Friday, as the 50 day EMA seems to be offering a bit of support. Furthermore, the jobs number came out the United States at just 49,000 added, slightly less than the consensus. This suggests that we will probably continue to march down the road of getting some type of stimulus, and the Democrats are looking at pushing through the stimulus package of $1.9 trillion through the process of reconciliation. While this will spend a lot of political capital, it certainly can be done and therefore stimulus should be relatively big.

AUD/USD Video 08.02.21

If stimulus is going to be huge, then there is a really good chance that the Australian dollar could be a beneficiary due to the fact that it is so highly correlated to the commodity markets, which of course will see increased demand in a scenario where there is so much spending by governments around the world. To the upside, I see the 0.78 level as a major barrier to overcome for the buyers, but I certainly think that it can be done. To the downside, the 0.75 level should be rather supportive due to the fact that we have seen a lot of interest in that area previously, and of course it is a large, round, psychologically significant figure. At this point, it is very likely that we go back and forth between the 0.75 and the 0.78 levels, as we continue to try to work off some of the froth from the big move previously. That being said, this is all about global reflation so we will have to wait and see how this plays out, but we are most certainly in an uptrend.

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