AUD/USD Price Forecast – Australian Dollar Gets Massive Boost on Monday

The Australian dollar has been very strong during the day on Monday, as we continue to see a lot of noisy behavior in general. The market has bounced quite significantly, but quite frankly when you look at the chart you can see just how oversold we had been. At this juncture, the market probably still has a little further to go but as we head towards the Jackson Hole meeting, the questions around what the Federal Reserve will do next certainly will hang in the air. If they suggest that tapering is in fact happening relatively soon, that could be very strong for the US dollar and could hammer the Australian dollar as a bit of a collateral effect.

AUD/USD Video 24.08.21

It is also worth noting that Australia is finally learning that the draconian lockdown measures have not stop the spread of coronavirus, so perhaps there is a little bit of hope that they will reopen their economy. If they do, that obviously should be good for the currency, or at the very least “less bad.” Either way, we are a little bit oversold at this point, so I would anticipate a bit of a bounce and quite frankly this is possible all the way up to at least the 0.73 level above, if not 0.74. If you are a short-term trader, then I suppose you could be a buyer, but I am much more comfortable fading rallies that show signs of exhaustion, and because of that it will take a certain amount of patience to wait for a strong selling set up to get involved in.

For a look at all of today’s economic events, check out our economic calendar.