AUD/USD Price Forecast – The Australian Dollar Pulls Back

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has pulled back a bit during the trading session on Monday, as the 0.67 level has offered a bit of resistance. If we can break above this area, then the market is likely to continue going higher, reaching toward the 200-Day EMA. That being said, it certainly is overdone so a pullback is probably the best answer regardless of what happens over the longer term. I don’t necessarily think that the US dollar is going to suddenly fall apart, but it did get a bit overdone, so this is a nice little recovery.

If we pull back from here, it’s likely that we could go down to the 0.65 level, the top of the previous consolidation region. If we break down below there, then it’s very possible that we will eventually go back to the lows. Several Fed speakers have already stated that the market overreacted to the cooler than officially expected CPI figures, and therefore I think a bit of a correction is likely to continue to be the case. Furthermore, you also have to keep in mind that the Australian dollar is highly levered to the Chinese mainland, and of course commodities in general.

Because of its relation to commodities, and the fact that the Federal Reserve is going to do everything it can to crush inflation, it does make sense that commodity currencies suffer. After all, rising commodity prices is literally the definition of a huge chunk of inflation, so therefore the higher that commodities go, the more aggressive the Federal Reserve will be. Ultimately, this is a market that is also pressing the 0.67 level for resistance, as it was previous support. Market memory could be reason enough to cause a pullback.

AUD/USD Price Forecast Video for 15.11.22

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