AUD/USD Price Forecast – Australian Dollar Continues to Drift Lower

The Australian dollar initially tried to rally during the trading session on Friday but gave up quite a bit of the gains. In fact, by the time the jobs number came out, the Aussie was a negative territory yet again. Ultimately, this is a market that I think will continue to see sellers on short-term rallies as the Aussie continues to get punished for being a commodity currency. Furthermore, the Chinese mainland is now worrying about lockdowns at some of the harbors, so this of course has a bit of a “knock on effect” on the Aussie as well.

AUD/USD Video 10.01.22

The overall attitude of the market seems to be one that is willing to give up some gains, and you can even make an argument for a rising wedge that had broken. (Full disclosure, I do not like that pattern, but it is something that a lot of people will trade.) That being said, I believe that the US dollar will continue to climb for no other reason than the simple fact that interest rates in America are going higher in the Federal Reserve is most certainly going to continue to tighten throughout 2022. In that scenario, it will create a little bit of a dollar shortage globally, and that will be reflected in the pricing of the greenback worldwide.

Any rally at this point time looks like a selling opportunity to me, especially near the 50 day EMA which is where the selling kicked off just a few days ago. I am not expecting any type of meltdown, I just recognized that it looks like a continuation of the downtrend.

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