AUD/USD Weekly Price Forecast – The Australian Dollar Pulls Back from Weekly Highs

Australian Dollar vs US Dollar Weekly Technical Analysis

The Australian dollar has rallied significantly during the week, to reach the 50 Week EMA. We have pulled back just a bit late though, and now it looks as if we are starting to ask questions as to whether or not this was a major turnaround in attitude, or if it was simply a dead cat bounce in a market that had sold off viciously. At this point, it’s difficult to imagine a scenario where the market goes straight back up in the air, but it certainly has been very bullish as of late.

Keep in mind that a lot of what’s going on will involve bond markets. This is an interesting pair because the Australian dollar is highly levered to China, which is reopening, and then of course is highly levered to the commodities markets. On the other side of the equation, you will have the US dollar, which has seen rising yields which is bullish for that as well. I anticipate that this pair is still going to be very sloppy, just as we have seen over the last several months. We are all over the place, and unfortunately, I do not see that attitude changing anytime soon. This is a market that simply has no idea what to do with itself from a longer-term standpoint. It is because of this that you need to be cautious with your position size, and quite frankly you need to take your time putting positions on.

At this point, break down below the bottom of the weekly candlestick could send this pair back down to the 0.70 level, but I don’t necessarily have as much clarity as I would like. Alternately, if we were to break above the highs of the week, we will more likely than not try to recapture the 0.7450 level.

AUD/USD Price Forecast Video 06.06.22

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