AUD/USD Price Forecast – Australian Dollar Continues to Push HigherThe Australian dollar fell on Tuesday but has found enough buying pressure near the 0.77 level to bounce a and continue to show strength as we await the FOMC.
The Australian dollar continues to look strong overall, despite the fact that it initially fell during the trading session on Tuesday. Looking at the 0.77 level, it does look as if it is trying to find a bit of support, but so far it does not look as if we are ready to make a “higher high.” If we do break out to a fresh, new high though, that opens up the possibility of a move to the 0.80 level. In fact, that is my longer-term thesis. This is based upon stimulus and of course the idea of more demand for commodities as Australia is such a huge producer of them.
AUD/USD Video 27.01.21
To the downside, if we do break down below the 0.77 handle, then we could go looking towards the 50 day EMA. The 50 day EMA is sitting near the 0.76 handle, and of course there is a certain amount of psychological support at the 0.75 handle. With that being said, I think you can continue to buy short-term pullbacks on the whole, but I also recognize that there is a lot of froth in the markets against the US dollar currently, so a short-term pullback of a couple of handles would not necessarily be the worst thing that could happen to the Aussie dollar.
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Pay close attention to the US Dollar Index, it is currently trying to reach towards extreme lows again, an area that has caused some major issues in the past. That being said, the FOMC meeting on Wednesday will probably have the greatest influence on what happens next, as it will influence the US dollar against everything, not just the Australian dollar.
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