AUD/USD Price Forecast – The Australian Dollar Pulls Back

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar initially tried to break above the 50-Day EMA during the trading session on Tuesday. Asian traders picked the ball up where the North American traders left it, but we started to see a bit of a pullback rather quickly. At that point, the Aussie then turned around and waited for the CPI figures coming out of the United States.

As they came out much hotter than anticipated, traders are having to bet that the Federal Reserve will continue to stay very hawkish with its rhetoric and monetary policy, something that should not be a huge surprise considering that the central bank has been saying this for some time. However, it is worth noting that the market reacted that way regardless, so I do think that it is probably only a matter of time before we retest the lows again, an area that we had been asking questions of as to whether or not it is a “double bottom.” Because of this, I think we have a situation where the 0.67 level sets up for a huge fight.

If we break down below the 0.67 level, it would open up the floodgates in this pair, as the level is a major support area on longer-term charts. In that scenario, the US dollar would probably swallow everything, including the Australian dollar. Ultimately, that looks like it could very well be a real threat at this point. Fading rallies continue to work as far as I can see, but we may see a pretty ugly move over the next couple of sessions. Keep in mind that the pair has been resilient in the face of US dollar strength in the past, but it eventually succumbs to that pressure.

AUD/USD Price Forecast Video for 14.09.22

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