AUD/USD Price Forecast – Australian Dollar Tests 50 Day EMA

The Australian dollar initially tried to rally during the trading session on Tuesday but found the 200 day EMA to be far too much to get above, as we sold off towards the 0.74 handle. The Reserve Bank of Australia has kept its monetary policy going forward. Some people had suggested that perhaps the RBA would extend his tapering, but as it has chosen not to, that takes one of the main reasons on the Australian dollar off the table.

AUD/USD Video 08.09.21

Nonetheless, there is a significant amount of support underneath, so I would not be a seller until we get below the 0.73 handle. If we break down below that level, then it is very likely that we could go lower, perhaps reaching towards the 0.71 handle. Ultimately, the 0.75 level above being broken could send this market much higher, perhaps reaching towards the 0.80 level over the longer term.

Keep in mind that the Australian dollar is highly levered to China and of course the commodity market. It should be noted that there are signs of defaults in the corporate bond markets on the mainland, which certainly will not do much good for the Chinese economy. If we start to see that pick up steam, the Australian dollar will get sold off as it is the closest thing to a free-floating currency that you can trade when it comes to China. Ultimately, if we see some type of major shift in market sentiment, this will probably be one of the most interesting places to play. Ultimately, I think that the market will give us clarity by the end of the week, so be very cautious with your trading position size, and only add as the trade shows itself.

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