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

By:
Christopher Lewis
Published: Jul 12, 2021, 13:41 UTC

The Australian dollar initially tried to rally during the course of the trading session on Monday but failed at the 0.75 handle again.

AUD/USD

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The Australian dollar initially tried to rally during the trading session on Monday but struggled at the crucial 0.75 handle. The 0.75 handle of course is a large, round, psychologically significant figure that could cause a bit of headwinds for the currency pair. That being said, we are also paying close attention to the lockdowns in Australia, which now look likely to be extended. If that is going to be the case, that will obviously weigh upon the currency as well.

AUD/USD Video 13.07.21

When you look at the charts, you can see that the market has been grinding lower for a while, and the 200 day EMA above continues offer a significant amount of resistance. Ultimately, it looks as if the market could grind all the way down to the 0.70 level if we continue to have more of a “risk off” attitude around the world, although this particular pair may simply fall due to the internal problems with Australia. Furthermore, it is also worth noting that the Chinese credit impulse has been rather negative as of late, which means that China could be slowing down. If that is the case, and of course there is also the ongoing trade spat between Australia and China, that could spell very serious issues for the Aussie itself.

I am also paying close attention to the 10 year yields, because if they continue to drop in the United States, that also shows that people are starting to buy safety, which of course almost always means that the US dollar strengthens. Ultimately, looking at the choppy behavior in this pair, I think we continue to see downward pressure. If we were to break above the massive shooting star from last week, then it is possible that we could see a turnaround, but until then I would not really pay too much attention to rallies.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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