Australian Dollar Bounces

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar rallied a bit during the trading session on Wednesday to break above the 0.74 level. That being said, it should also be pointed out that we have bounced from the 50 Day EMA, making it a classic technical analysis play. However, there is a significant amount of resistance just above, especially near the 0.75 level. The 0.75 level of course is a large, round, psychologically significant figure, and an area where we have seen action in the past.

A lot of this is going to come down to whether or not the commodity markets continue to go higher, because there is a bit of a battle between inflationary pressures to the upside, but at the same time demand for commodities should very well be dropping. Because of this, the market is likely to see a lot of volatility, and therefore it would not be surprising at all to see this market turn right back around and break down. If we break down below the 200 Day EMA, then the market could go much further to the downside, perhaps reaching the 0.72 level underneath. Breaking below that level then allows the possibility of a move down to the 0.70 level.

When you look at the longer-term chart, the 0.75 level is essentially the top of major resistance in the overall consolidation. On the downside, the 0.70 level has a significant amount of support hanging about it and is the bottom of the larger consolidation area. The market has been bouncing between these two areas for quite some time now, so it is worth noting every time we get close to one or the other. Ultimately, we are closer to the top than the bottom.

AUD/USD Price Forecast Video 21.04.22

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