AUD/USD Price Forecast – Australian Dollar Trying to Build Base
The Australian dollar has rallied just a bit during the trading session on Wednesday to show signs of life yet again near the 0.71 handle. The market had sold off quite drastically over the last couple of weeks, so it certainly would make a lot of sense to see an attempt to bounce in this general vicinity. This is especially true considering that the market is so overdone and is sitting where we had seen a lot of previous support.
AUD/USD Video 02.12.21
That being said, I do not necessarily like buying the Australian dollar, at least not at this point in time. I believe this is probably a market that is better off selling after the bounce, as the world continues to pay close attention to the interest rate situation. With the Federal Reserve finally admitting that inflation is no longer “transitory”, this opens up the door for interest rates to continue spiking in the United States. Somewhere around the 0.73 level I would anticipate a lot of selling pressure, especially as the 50 day EMA sits just above there.
All things been equal, the market looks very likely to continue seeing a lot of noisy behavior but given enough time I think we will probably error on the side of weakness after a small recovery. After all, markets do not go in the same direction forever so this has been a bit overdue. With this in mind, I am simply going to be patient and wait for a better set up. Keep in mind that the jobs number on Friday could have massive implications.
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