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Australian Dollar vs US Dollar Technical Analysis
The Australian dollar has fallen initially during the training session on Monday, only to turn around and show signs of life. The market is stuck between the 50 Day EMA underneath and the 200 Day EMA above. Because of this, it does make a significant amount of sense that we will see a lot of noise. Algorithmic trading almost certainly dictates this in the short term.
If we can break out above the highs of the Friday session, then it’s likely that the Australian dollar will continue to recover, perhaps reaching as high as the 0.74 level. On the other hand, if the market breaks down below the lows of last week, then it opens up a move down to the 0.70 level, an area that I think would attract a lot of attention from a psychology standpoint. The question we have now is whether or not this massive move higher has been due to the fundamentals, or if it has been a bit of a dead cat bounce.
The RBA is expected to raise rates this week, the first time in 12 years they have been able to do so in back-to-back meetings. Whether or not the statement is enough to keep people bullish on the Australian dollar may be the determining factor overall. Because of this, keep your position size light until we get some type of confirmation. In the meantime, I would anticipate more sideways and choppy action than anything else being the norm over the next several days as we tried to determine the next bigger move.
AUD/USD Price Forecast Video 07.06.22
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This article was originally posted on FX Empire
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