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AUD/USD Price Forecast – Australian Dollar Continues to Look Sluggish

Christopher Lewis
·2-min read

The Australian dollar has initially tried to rally during the trading session on Wednesday but found enough resistance at the 50 day EMA to turn around and show signs of weakness again. That being said, we are sitting on top of significant support as well, so I think that the Australian dollar will continue to be very noisy in this general vicinity. I also find this very interesting, considering that yields in the United States are starting to drop again, yet the Aussie does not seem to be able to take advantage of it.

AUD/USD Video 08.04.21

If we do break down below the lows of last week, I think that opens up a huge move lower, perhaps about 400 pips or so. This is because we have formed shooting stars for both the February and the March candles. It is pretty rare that you see a couple of shooting stars in a row that do not produce some type of effect on the market. Because of this, I am very leery about going long of this pair, as I do think that there will be a lot of concern going forward.

If those yields in America start to spike again, that will probably be enough to send this market lower. On the other hand, if we were to rally from here, I think that we probably have the 0.78 level as a bit of a gatekeeper for higher pricing. The 0.80 level is a massive resistance barrier that I think it extends to the 0.81 handle and clearing that would have this as more of a “buy-and-hold” type of market. Not only would it be the recapturing of a major barrier, but it would slice through those two previously mentioned shooting stars.

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

This article was originally posted on FX Empire

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