AUD/USD Forecast: Hanging on by a Thread

Christopher Lewis

The Australian dollar has fallen significantly again during the course of the trading session on Thursday, as we are rapidly approaching the 0.74 level. It is a point where I start to get aggressively short of this market, because it will be yet another breach of support in a market that has been rolling over for months. Australia seems hell-bent on destroying its own economy as lockdowns continue, so that of course will have a lot to do with what happens with the Aussie.

All things been equal, this is a market that I think probably goes looking towards the 0.70 level as Australia remain shut down in New South Wales. The question is what will be the next area to be closed down? With the lack of deaths and only 44 infections of the Delta variant, one would think that the Australians are going to be very quick to put everything to a halt yet again. Beyond that, you also have to worry about China slowing down which is going to do no favors for Australia as well, so at this point in time I do not see anything good coming out of this currency pair.

To the upside, we have the 0.75 level that will offer a certain amount of psychological resistance, and it should be noted that the 200 day EMA sits just above there is so at this point in time it is difficult to imagine that we simply slice through it. In fact, it is not until we break above the 0.76 level that I would be bullish, and that does not look like it is going to happen anytime soon. Because of this, I am looking for rallies to sell as well as that breakdown. I believe that the US dollar is threatening a breakout in a big way against multiple currencies, and of course the Aussie will be any different.

Overnight, we had seen weaker than anticipated Chinese GDP numbers, and as those numbers are typically manipulated, that is a very negative sign in general. With that being the case, it will be interesting to see how this plays out as the People’s Bank of China had recently cut RRR regulations in order to stimulate the economy, but at this point it looks like the market itself is not overly impressed.

AUDUSD

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.