AUD/USD Price Forecast – Australian Dollar Bounces From 50 Day EMA
The Australian dollar has rallied a bit during the trading session on Friday as the 50 day EMA seems to be holding from a technical standpoint. Furthermore, the Thursday candlestick was a hammer and of course we have to take a look at the fact that retail sales in the United States were a little bit soft, suggesting that the Federal Reserve will of course continue to be very loose with its monetary policy. That should help the Australian dollar, but at the same time we do have a few headwinds coming out of Asia.
AUD/USD Video 17.05.21
What I mean by this is that the Chinese are playing “hardball” with the Australians when it comes to trade negotiations as relations between Canberra and Beijing have chilled as of late. It looks as if the Chinese are going to leverage their power over the Australian economy, and therefore one would think that sooner or later the Australians will give in. In fact, they are already suggesting that they are ready to come back to the negotiation table while the Chinese seem to be in no hurry.
Nonetheless, the demand coming out above the rest of the major economies in the world for commodities should help lift the Aussie in general. This does not mean that we go straight up in the air, but it does suggest that the trajectory will continue to be from the lower left to the upper right on the charts. The 0.80 level above is the target eventually, but we may be looking at a good month before we get there. To the downside, I still see the 0.76 level as a major support level.
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This article was originally posted on FX Empire
