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AUD/USD Price Forecast – Australian Dollar Continues to Plunge

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·2-min read
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  • AUDUSD=X
  • AUD=X
  • USD=X

The Australian dollar has fallen a bit during the course of the trading session on Friday to reach towards the 0.7050 level. At this point in time, it is very likely that we could go looking towards the 0.70 level. All things been equal, if the market were to rally, I think that offers a nice shorting opportunity because quite frankly the Australian dollar does not seem to be able to hold any type of strength. As long as that is going to be the case, you simply cannot fight this type of momentum.

AUD/USD Video 06.12.21

If we break down below the 0.70 level, then the market will open up towards the 0.68 handle, but at this point in time the market is oversold, so I am still waiting to see whether or not we see some type of significant bounce in order to find “value” in the US dollar. The 50 day EMA above is sitting just below the 0.73 level and heading lower. At this point, I have no interest whatsoever in trying to buy this market, because quite frankly I am not into catching falling knives.

The Australian dollar is highly correlated to China and of course the overall reopening trade, so I believe at this point in time it makes quite a bit of sense that it struggles. Furthermore, the US dollar has been strengthening for a while, so I think it makes quite a bit of sense that we continue to go much lower. The oversold condition needs to be approached carefully though, so I think at this point in time it is likely going to be easier to buy the US dollar against other currencies that have not melt down like the Aussie has.

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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