Australian Dollar Continues to Selloff

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar initially tried to rally during the trading session on Wednesday but gave back the gains rather quickly and started to crash towards the 0.74 level rather early. By doing so, it looks like we are ready to continue that pullback that we had seen over the last week or two. Remember, the Reserve Bank of Australia dropped the word “patient” from its statement, sending the Australian dollar higher. However, the FOMC Meeting Minutes was much more hawkish than previously anticipated, so it had the US dollar strengthening again. Furthermore, the interest rates in America shooting straight up in the air have had a strengthening effect on the US dollar as well.

One thing the need to keep in mind when it comes to the Australian dollar is that it is highly levered to commodities, and of course, commodities are starting to suffer a bit at the hands of the slowing global demand. If we are in fact going to enter a global recession, it is very likely that we will see commodities drop, and therefore the Australian dollar will probably fall right along with them.

It is also worth noting that we had struggled at the 0.75 level, an area that of course causes a lot of psychological interest and for that matter, structural interest as we have seen the market pull back from there a couple of times. The market will continue to be very noisy, but I do think it is probably only a matter of time before we start to fall again. The 50 Day EMA sits just below, as does the 200 Day EMA, so there are a couple of dynamic support levels that we need to pay attention to.

AUD/USD Price Forecast Video 14.04.22

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