AUD/USD Price Forecast – Australian Dollar Continues to Recover

The Australian dollar has rallied during the course of the trading session on Tuesday to break slightly above the 0.71 level at time of writing. The market looks very likely to continue going higher, but somewhere near the 0.7175 handle, there seems to be a lot of noise. Because of this, I think we continue to rally ever so slightly, but given enough time I do expect to see a certain amount of exhaustion as well. The market continues to see a lot of recovery from an extreme oversold position, so it does make a certain amount of sense that we continue to do so. The oversold condition needed to be corrected because we had dropped so hard.

AUD/USD Video 08.12.21

At this point, if we were to turn around a break down below the 0.70 level, then the market would almost certainly fall apart. At this point, it is difficult to imagine a scenario where I would be a buyer of the Australian dollar, at least until we get above the 50 day EMA. It will take quite some time to get above there, so having said that I do not really have any scenario in which I am willing to be a buyer in the short term.

Nonetheless, the market is more likely to see exhaustion between now and then, so it simply a matter of waiting for a nice opportunity to start shorting again, which takes a certain amount of patience. The overall attitude of the market continues to see quite a bit of volatility, and I think that is essentially what we are going to do is recover, and then jump on the pullback.

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