AUD/USD Price Forecast – Australian Dollar Looking to Break Out

The Australian dollar has rallied a bit during the course of the trading session on Tuesday to show signs of strength again, but at this juncture it is likely that we will continue to see the area between here and 0.75 offer resistance. If we can get above there, then the market will certainly have changed its overall attitude, as it will kick off a breakout of the major “W pattern” that we clearly have formed. Otherwise, then the market pulls back into this consolidation area. At this point, the market is likely to see a lot of noise, but we should get some type of resolution to all of this relatively soon.

AUD/USD Video 20.10.21

On pullbacks, it is not until we break back below the 0.74 level that I would consider the resistance as holding. The market pulling back but staying above there is simply trying to pullback in order to build up the necessary momentum to break out, but obviously there are a lot of moving pieces at the moment, especially considering that the Chinese economy is starting to struggle, and that will have its effect on the Australian dollar and by extension the Australian economy suffering.

However, as I am sure you know by now, financial markets have absolutely nothing to do with the economy most of the time, so if the US dollar continues to fall apart, that will send this market to the upside. Sometimes, it is about one particular currency and as I woke up this morning, the US dollar clearly had significant selling pressure. If that continues, that may be everything we need to go higher. It is also worth noting that we are now above the 200 day EMA.

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