AUD/USD Price Forecast – Continues to Find Buyers on Dips

The Australian dollar initially fell during trading on Tuesday but then found enough support near the 50 day EMA to bounce just as we did during the previous session. With that being the case, it looks as if the Australian dollar is still well supported, and it is likely that we will continue to find buyers on dips, as we await the FOMC meeting on Wednesday. Beyond that, we also have to worry about the question and answer part of the session, which people will be paying close attention to as to whether or not the Federal Reserve is going to do something about yields.

AUD/USD Video 17.03.21

If those yields are allowed to run wild, it is very likely that the US dollar will continue to strengthen so I think that Wednesday could be a crucial day for the currency markets, as at that point in time we could get an idea as to what the Federal Reserve may or may not do over the next month. If the Federal Reserve is willing to step in and loosen monetary policy through another operation twist or other search scheme, then that should help the Australian dollar rally from here and go looking towards the 0.80 level. On the other hand, if the Federal Reserve does not even look like they are paying attention to the rates coming out the bond market, is very possible that we could break down. If we break down below the lows of the previous week, I think at that point in time it is likely that the Aussie will go looking towards the 0.75 level in the short term.

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