AUD/USD Price Forecast – Australian Dollar Continues Downward Consolidation

The Australian dollar has fallen again during the course of the trading session on Thursday as the Australian dollar continues that very sickly, as the Australians have been locking parts of their economy down yet again. With this being the case, market is likely to continue going lower, and it is worth noting that the US Dollar Index is on the verge of a breakout. If we do get that, then it is likely that we will see a massive amount of US dollar strength overall.

AUD/USD Video 16.07.21

Breaking down below the 0.74 level opens the next leg lower, and I will be more than comfortable shorting this pair that point in time because quite frankly “it has not acted quite right” for a while. The “H pattern” that we broke down from continues to look very negative, and therefore I think we are going to see a bit of follow-through given enough time. This will be especially true if we continue to see money flowing into the bond market, which it has been doing as of late. Ironically, now that the entire narrative is “inflation”, the markets are telling us something quite differently when you look at the charts.

It appears that the bulk of Wall Street is prepared for the “transitory inflation scenario”, and therefore the narrative does not quite match the positioning, which is a huge signal in and of itself. All things being equal, this is a market that I think will continue to go much lower unless of course we were to break above the 0.76 handle, which would be a complete shift in the overall attitude of the Australian dollar.

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