AUD/USD Price Forecast – Australian Dollar Trying to Find Footing

The Australian dollar has broken down a bit during the course of the trading session on Tuesday to fall below the 0.71 handle. By breaking down below there, the market found enough buyers to turn things around and form a bit of a hammer. That being said, the market is still suggesting that perhaps the most recent bounce is starting to give way, and if that is going to be the case it is very likely that we would see a repeat of the last couple of weeks. Yes, there has been a nice bounce as of late, but when you look at it through the prism of risk appetite, that will be interesting to see how this plays out due to the fact that the Federal Reserve is in the midst of a two-day meeting, so what Chairman Powell says after that is going to come into focus for the US dollar.

AUD/USD Video 15.12.21

To the upside, if we can take out the 0.72 level, then we could see this market go much higher. The market then could go looking towards the 0.7350 level above. Nonetheless, this is a market that has been very bearish for a while, and I just do not see how this changes without Jerome Powell suggesting that perhaps they are going to slow down tightening, which is very unlikely to happen anytime soon.

All things been equal, we are heading towards the end of the year so it does make a certain amount of sense that we would see a lot of nonsensical moving back and forth, as nobody really knows what they are going to do next. All things been equal, this is a market that I still favor the downside.

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