AUD/USD Price Forecast – Australian Dollar Continues to Base

The Australian dollar has rallied slightly during the trading session on Monday as we continue to hang about the 0.76 level. That is an area of course so that is a large, round, psychologically significant figure but at the same time you can make an argument that the 50 day EMA is offering a bit of resistance, and of course we have to take a look at the February candlestick as a warning sign as it was a massive shooting star. Furthermore, the March candlestick of course looks the same, so I certainly think that this is a market that you need to be very cautious with, as it is highly levered to the commodity trade, and although a lot of people are pushing the inflation narrative, there is still obviously a lot of work to get through.

AUD/USD Video 06.04.21

The 0.80 level is an area where you would see a lot of resistance extending to the 0.81 handle, based upon what I see on the monthly chart. If we were to get above there, that could be the beginning of a major “buy-and-hold” type of situation, but at this point in time there is a ton of work to get above there.

On the other hand, if we break down below the 0.75 handle, that could open up a bit of a “trapdoor” to send this pair much lower. If it does in fact happen, then I think we could be looking at a move down to the 0.71 level. That is based upon the head and shoulders pattern, or at least the “measured move” of the pattern.

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