AUD/USD Price Forecast – Australian Dollar Pulls Back From Highs

The Australian dollar has pulled back just a bit during the trading session on Thursday, as we may have gotten a little bit ahead of ourselves. Ultimately, this is a market that I believe continues to see more upward pressure, but a pullback offers value that a lot of people will be looking towards. The 0.78 level has offered significant resistance, but at the end of the day it is worth paying attention to the fact that the 0.75 level underneath was important in the past, and it should offer a bit of a “floor the market” going forward. This is exacerbated by the fact that we now have the 50 day EMA crossing above the band of support in that area.

AUD/USD Video 08.01.2021

The Australian dollar will be a major beneficiary of stimulus going forward, and of course will behave accordingly. With stimulus coming out the United States and other countries around the world, it makes sense that the Australian dollar gains due to the fact that the Aussie dollar is highly levered to commodities, which of course get bought in times of reflation, which is essentially what stimulus is supposed to be. I do believe that this will continue to be a bigger driver of the market than anything else, so I like the idea of buying dips going forward. In fact, I am not concerned about the Aussie until we break down below the 0.74 handle. I do not see that happening anytime soon, so therefore I remain bullish but recognize that a little bit of a pullback is healthy.

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