AUD/USD Price Forecast – Australian Dollar Still Flagging

The Australian dollar has done very little during the trading session on Thursday as we continue to see more of a flag being built, suggesting that there is more upside coming. That being said, we have seen a little bitty US dollar strength as of late, perhaps due to the oversold condition that it was an, or maybe even due to the fact that interest rates are rising due to the expectations of massive stimulus and massive debt needed to be financed. In a perverse kind of way, that has actually helped the greenback, although longer term it certainly will be negative.

AUD/USD Video 15.01.21

Keep in mind that the Australian dollar is sensitive to the commodity markets, which of course is a play on the “reflation trade.” Because of this, I do expect the Australian dollar to be one of the better performers for 2021, but obviously we are a little bit extended at this point. I would be very interested in buying dips here, especially if it were to drop down towards the 0.75 handle, which I think is a gift for traders that are looking to play the longer-term cycle.

This is not to say that we cannot go higher from here without pulling back, it is just that the pullback would be the preferred trade if we get that opportunity. My target to the upside is the 0.80 level, which has a massive ramifications on longer-term charts. I have no interest in shorting the Aussie, at least not until something were to change quite drastically from a macroeconomic standpoint.

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