AUD/USD Price Forecast – Australian Dollar Continues to Build Base

The Australian dollar has initially tried to rally during the session on Monday but gave back the gains to go reaching towards the 50 day EMA. The 50 day EMA has been worth paying attention to for some time, as it looks like we continue to see a certain amount of resiliency found at that indicator. Nonetheless, underneath will have the 0.77 handle which of course has offered a bit of support as well. Ultimately, I do think that what we are going to see is a continue grind to the upside, but I think the keyword here is going to be “grind.”

AUD/USD Video 18.05.21

Underneath, if we were to break down below the 0.77 handle, then we could get a move towards the 0.76 level which is even more supportive. Pay attention to the 200 day EMA, it is now sitting at the 0.75 level, which only intensifies what would be a very important handle to say the least. If we were to break down below there, then the Australian dollar could lose 500 pips rather quickly.

Keep in mind that the Australian dollar is highly levered to the idea of the reflation trade and of course the commodity boom, which continues. With this being the case, I think the Australian dollar will eventually pick up enough momentum to go much higher, but that does not necessarily mean that is going to be easy to deal with from a volatility standpoint. I can tell you that the 0.80 level is massive in its implications on the monthly chart, so if we can clear that resistance region, the Australian dollar could really start to take off.

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