AUD/USD Price Forecast – Australian Dollar Continues to Look Threatened
The Australian dollar has been all over the place during the trading session on Friday, but when you look at the overall attitude of the market, you can see that we most certainly have been looking very weak recently, as the Aussie dollar is now comfortably below the 0.75 handle. Because of this, the market is likely to continue going lower given enough time, unless of course we can recapture the 200 day EMA. If we were to break above the 200 day EMA, which currently sits at the 0.7550 level, then it at least sets up the possibility of a recovery. Until then, I look at this as a potential “fade the rally” type of scenario.
AUD/USD Video 05.07.21
If we break down below the bottom of the candlestick for the session on Friday, then it opens up the possibility of going all the way down to the 0.70 level over the longer term. Quite frankly, the US dollar is on the precipice of breaking out on the US Dollar Index, so this is something that simply must be paid close attention to.
The Australian dollar has its own issues, not the least of which will of course be the fact that Australia continues to lock things down, despite the fact that there has not been a death in months. With that being the case, the self-immolation of the Australian economy of course will work against the value of the currency in and of itself. With that being the case, the market is likely to continue to see a lot of negative headwinds, so at this point in time I am much more comfortable shorting than going long.
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