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AUD/USD Price Forecast – Australian Dollar Gives Up Early Gains

By:
Christopher Lewis
Published: Sep 27, 2021, 13:42 UTC

The Australian dollar has rallied early during the trading session on Monday, only to turn around and break down significantly. That being said, we are still very much in a range.

AUD/USD Price Forecast – Australian Dollar Gives Up Early Gains

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The Australian dollar has initially tried to rally during the trading session on Monday but gave back the gains rapidly as the 0.73 level continues to be a major barrier. As long as that holds, I suspect that sellers will continue to be attracted to this market on short-term rallies. The very first signs of exhaustion seem to get sold into, so with that in mind I like the idea of shorting this market on short-term charts. That being said, if we can break down below the lows of last week, I suspect this market will fall apart, which makes a certain amount of sense considering how much there is in the way of negative headlines coming out of China.

AUD/USD Video 28.09.21

Remember, the Australian dollar is essentially a proxy for China in the currency markets, and I do not think that is going to change anytime soon. With this being the case, if the pay attention to Evergrande and now other property developers in China, as this is a wrecking ball that could cause a lot of damage. Beyond that, Australia has showed itself down in a much more draconian way than other Western economies, so quite frankly the Australian dollar should be punished for a lack of economic growth.

Adding to all of this scenario is the fact that the US dollar is considered to be the “ultimate safety currency” for traders around the world, so it does make a certain amount of sense that it would be attractive. This is becoming increasingly more so due to the fact that interest rates on the 10 year note are rising in America as well.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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