AUD/USD Weekly Price Forecast – Australian Dollar Continues to Fight

The Australian dollar initially fell during the course of the week but has turned around to show signs of strength again. Ultimately, this is about the reflation trade, but it does look like we have a lot of choppiness to get through in the short term. When you look at the daily candlesticks, we have a nice little bounce but at the weekly chart certainly looks as if it is going to continue to go towards the 0.80 level. I think at this point though, we probably have a bit more in the way of time killing to get through.

AUD/USD Video 01.02.21

If we do pull back from here, then the market will probably find buyers down at the 0.75 handle. That is roughly where the 200 day EMA is, so on the daily charts it becomes a little bit more obvious for support. All things being equal though, I do think that we go higher over the longer term, but a pullback might still be necessary in order to get aggressive to the upside. Longer-term, I think we go looking towards the 0.80 level and beyond. This is a market that will continue to move based upon the idea of stimulus and reflation, so make sure you keep an eye on the ability of governments and central banks to continue to flood the market with liquidity. Whether or not we get real growth is a completely different story, but as long as there are demands for hard commodities, the Aussie dollar should be relatively well against the US dollar longer term.

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