AUD/USD Price Forecast – Australian Dollar Continues to Look Soft

The Australian dollar has gone back and forth during the trading session on Wednesday in a rather quiet range. At this point, we are sitting above the 0.76 level, which is major or area. If we break down below the most recent lows from last week, it is likely that this market would continue to go much lower. In fact, at that point I would anticipate a move down to the 0.72 handle.

AUD/USD Video 01.04.21

While there are a lot of reasons to like the idea of the Australian dollar going higher, in the short term it certainly looks as if we are ready to go much lower. The US dollar continues to get bought into due to the higher interest rates coming out of America, which of course will have people looking to buy bonds as they can get a real rate of return.

Nonetheless, Joe Biden seems intent on spending trillions stimulus, and that will probably have a negative effect on the greenback eventually, and of course there is the likelihood of demand for commodities in general, so that of course would have a positive effect on the Aussie. I think we will continue to see a lot of noisy behavior, but I think a pullback makes quite a bit of sense.

However, if we were to turn around and break above the 50 day EMA, then we could go towards the 0.78 handle, which has been resistance, but if we were to go above there then the market goes looking towards the 0.80 level. At this point, I still think that we probably have a significant pullback first though.

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