AUD/USD Weekly Price Forecast – Australian Dollar Continues to Grind Sideways

The Australian dollar has gone back and forth during the course of the week, as we continue to see a lot of noise when it comes to the idea of inflation. After all, inflation is good for commodities, and by extension potentially good for Australia. However, Australia does have a bit of a spat going on with China, and therefore that might be part of what has been slowing this market down.

AUD/USD Video 07.05.21

Looking at the chart, I do believe that we continue to see a lot of sideways action, and quite frankly do not have anywhere to be. Looking at the upside, the 0.80 level is a major resistance barrier that extends to the 0.81 handle. That is an area that if we break above, then it is likely that the Australian dollar is going to continue to go higher, perhaps reaching towards the 0.90 level over the longer term. To the downside, the 0.76 level has offered support as of late, and it is worth noting that the 50 week EMA underneath is starting a resource that area as well.

Keep in mind that the Australian dollar has been very bullish until recently, and although it has gone nowhere for a couple of months, the overall outlook of the market has been bullish for quite some time. After all, this little bit of sideways action pales in comparison to the massive move that we have seen since we have bounced from the absolute lows. In other words, this is a market that is going to demand quite a bit of patience going forward, and therefore I fully anticipate that at the end of next week, we will be having the same conversation.

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