AUD/USD Price Forecast – Australian Dollar Pulls Back After Massive Run Higher
The Australian dollar has pulled back just a bit during the course of the trading session on Monday, in what would have been a relatively quiet session anyway as the United States and Canada were both away for the holiday. At this point, the market looks as if it probably will go dropping towards the 0.74 level, or perhaps even the 50 day EMA in order to find support. As long as it does, then it is likely we will see a turnaround to reach towards the 200 day EMA, and then by extension the 0.75 handle.
AUD/USD Video 07.09.21
However, if we were to break down below the 0.73 level on some type of snapback, this is a market that could fall apart just as quickly as it did previously. That is a bit of a stretch at this point though, because the Australian GDP really get this pair flying again, as it was much stronger than anticipated. This is especially interesting, due to the fact that the Australian economy has been locked down for quite some time due to the overreach of the government versus the virus. All things been equal, this also is a reflection of the Chinese economy, which also looks as if it is struggling.
As long as that is the case, I think there is a little bit of a weight around the neck of the Aussie, despite the fact that we have seen such an explosive move to the upside. The fact that we have rallied probably has just as much to do with US dollar weakness than anything else. I believe that the market breaking above the 0.75 level would then kick off a longer-term “buy-and-hold” type of situation.
For a look at all of today’s economic events, check out our economic calendar.