AUD/USD Price Forecast – Australian Dollar Gaps Higher to Kick Off Week
The Australian dollar has gapped higher on Monday to show signs of life again, but quite frankly the market has been a bit overdone to the downside, and therefore it makes a certain amount of sense that we need a recovery bounce. This recovery bounce does not necessarily mean that I would be a buyer, just that I think given enough time the market needs to retest some of the previous support levels for resistance. We had reached an extreme low level, and it should be noted that Friday had very little in the way of volume so the freak out when it came to the virus was a bit overdone.
AUD/USD Video 30.11.21
All of this being said, I am simply looking for a bounce that I can sell into, which is the same thing I said last week. We have not had that yet, but it looks like we are starting to get towards that direction. Given enough time, I truly believe that we have a nice opportunity to short, but we probably need to get closer to the 0.7250 level before we think so. All things been equal, the market is likely to see a lot of noisy behavior, but the fact that we had gotten so ahead of ourselves certainly needs to be rectified in the short term. Keep in mind that Australia is also highly sensitive to commodities, which of course are recovering during the day on Monday as well, so that could fuel the bounce a bit more. Pay special attention to copper markets, as Australia is such a huge exporter.
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