Australian Dollar Continues to Hover Around a Major Resistance Barrier

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has continued to hover around the 0.75 handle, an area that will cause a certain amount of resistance based upon structure and psychology, so it should not be a huge surprise to see that we are treading water. Furthermore, this is a market that is at a crossroads, trying to determine whether or not long term it is going to rally, or if it is going to break down in favor of the US dollar as its European counterparts.

Keep in mind that the Australian dollar is supported by the commodity market and interest-rate differentials against most currencies. The US dollar has seen interest rates rise in its favor, and of course, it is still considered to be a “safety currency.” That being said, the commodity markets have been on fire as of late, and that has been a major driver of what happened with the Aussie. I anticipate that it will continue to at the very least give the Australian dollar a little bit of support, but if we can break above the 0.76 handle, the Australian dollar may continue its trajectory higher, perhaps reaching as high as the 0.78 level.

On a breakdown below the 0.7433 area, then I anticipate that the Australian dollar will more likely than not to drift towards the moving averages underneath. Speaking of moving averages, the 50 Day EMA is attempting to break above the 200 Day EMA to form the so-called “golden cross” that so many traders pay attention to from a longer-term standpoint. That being said, I still look bullish, but we obviously have a major barrier to get through. Perhaps Friday may be the answer that the buyers are looking for?

AUD/USD Price Forecast Video 01.04.22

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