AUD/USD Price Forecast – Australian Dollar Continues to Slump After Lockdown Expansion

The Australian government continues to lock down its own economy, which the market has rewarded with a cheaper currency due to the fact that economic activity in the country is going to continue to slow down. With that being the case, it looks like we are ready to start breaking down again, and therefore I will be keeping an eye on the 0.73 level, which of course is a large, round, psychologically significant figure, but more importantly it is an area that has offered significant support.

AUD/USD Video 12.08.21

To the upside, the 0.74 level offers resistance and previously had even been support. That being the case, the market has quite a bit of interest in that area and therefore if we rally at this point in time, I think there will continue to be sellers above. The 0.73 level underneath being broken to the downside could open up a move down towards the 0.70 level which is my longer-term target. Pay close attention to the 10 year note, because of those yields start to rally again, that also will provide downward pressure on this market.

We have recently had a death cross foreman this market and have not seen much in the way of positivity since that happened. Quite frankly, at this point I would not be interested in buying this market until we get well above the 0.75 handle, which of course is a large, round, psychologically significant figure. With that being the case, I think it is only a matter of time before the market continues to go much lower and therefore, I just do not see a bullish case anytime soon.

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