AUD/USD Price Forecast – The Australian Dollar Pulls Back From the 200 Day EMA

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar initially tried to rally during the trading session on Friday but gave bank gains above the 200 Day EMA as the market may have gotten a bit ahead of itself. The massive move on Thursday is being worked against on Friday as the bond yields in America are starting to rise. Ultimately, this is a market that I think will eventually have to determine its longer-term trend, and although it’s been very brutal to the upside, you have to look at this through the prism of how hard it sold off. The question now is whether or not this was a “dead cat bounce”, or if it was something else?

Your answers will be found in the bond markets. If yields in America begin to rise, just as they have on Friday, that will drive this pair back down. Yes, commodity markets do offer a little bit of a boost for the Australian dollar, but at the end of the day, it is the bond market that determines everything over the longer term. As yields rise, it’s going to continue to put downward pressure on this market. At the time of writing, the 10-year note is approaching 3% yield, which makes the US dollar much more attractive.

Alternatively, if we were to break above the highs of the trading session on Friday, then it’s likely that the Aussie dollar will continue to go looking toward the 0.7450 level, possibly even the 0.75 level after that. On the downside, we could revisit 0.70 if we get more of a “risk-off” type of move as well.

AUD/USD Price Forecast Video 06.06.22

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