AUD/USD Price Forecast – Australian Dollar Plunges

The Australian dollar has plunged early during the Monday session as we continue to see a lot of weakness coming out of Australia, for a multitude of reasons. To begin with, Australia is one of the few major economies that continues to lock itself down, as both Sydney and Melbourne have been closed due to the Delta variant of the coronavirus. Nonetheless, we also have to pay close attention to the fact that the Chinese economy is slowing down, and of course Australia is highly sensitive to that. Furthermore, we also have a bit of a minor trade war between Australia and China, so quite frankly Australia is probably one of my least favorite places out of all of the major economies right now.

AUD/USD Video 20.07.21

Looking at the technical analysis, there really is not much to keep this market from falling towards the 0.70 level underneath, which is where the next major round figure is. This does not necessarily mean that it is going to get there overnight, but I do think that we eventually find the Australian dollar reaching towards that level. Clearly, we have broken below the 0.75 handle decisively, and that is now going to be a major resistance barrier on the way back up.

Furthermore, we are getting very close to forming the so-called “death cross” when the 50 day EMA closes below the 200 day EMA, currently sitting just above that 0.75 handle as well. Ultimately, this is a pair that I will continue to sell on rallies for the foreseeable future, but if we suddenly get a major shift in risk appetite, I would not hesitate to go in the other direction.

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