AUD/USD Price Forecast – Australian Dollar Falls Hard

The Australian dollar initially tried to rally during the trading session on Tuesday, but then broke down significantly to reach towards the 0.6250 level. That is the bottom of a hammer from the Thursday session that if it gets broken down below, it should kick off another 50 pips of selling almost immediately. The 0.62 level is going to be an area where we could see a little bit of support, but I believe that is going to be minor support, and perhaps open up the door to the 0.60 level underneath.

AUD/USD Video 22.04.20

Keep in mind that the Australian dollar is highly levered to the Chinese economy, so it makes sense that we would suffer in this market as there is a huge demand for US Treasuries, which should open up the door for a stronger US dollar rates. The Australian dollar on the other hand represents an economy that has entered its first recession in over 30 years. While China is trying to get back to work, the reality is that there has been massive amounts of demand destruction out there around the world, so quite frankly it doesn’t matter how much China builds. This will weigh upon other things along the lines of copper and other base metals that Australia is such a major exporter of. In other words, there is going to be less demand for the Aussie dollar in general. With this, I believe that we have reached the pinnacle of the short term uptrend, and it looks like we are going to continue the downward pressure going forward.