AUD/USD Price Forecast – Australian Dollar Falls Apart

The Australian dollar has fallen again during the trading session on Thursday as the Australians are locking down their economy yet again. This of course is going to do horrible things to the Australian economy, and it is starting to be shown in this market. Furthermore, the US dollar has picked up a bit of strength in the “risk off” type of environment that we find ourselves in. After all, the US dollar is starting to pick up against several currencies.

AUD/USD Video 09.07.21

Japan has also noted that they are going to restrict spectators at the Olympics, as Tokyo has entered yet another state of emergency. In other words, there is serious fear out there that the lockdowns are going to start picking back up. If that is going to be the case, that drives up a lot of demand for the US bond market, which of course is priced in US dollars. We have seen the 10 year note in America drop down to 1.25% yields, meaning that investors are doing everything they can to protect themselves.

As you can see there is a “H pattern” just above, and it is most certainly validated at this point. Because of this, I think that we continue to go much lower and if we can break down below the 0.74 handle, that will open up a continuation of the move lower, perhaps down to the 0.70 level over the longer term. Regardless, I look at any rally at this point as a nice selling opportunity, unless of course something changes quite drastically. At this point though, I just do not see a reason to get long.

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