AUD/USD Price Forecast – Australian Dollar Forming Flag

The Australian dollar rallied a bit during the trading session on Thursday to test the top of what is starting to look more and more like a bullish flag. The market breaking above the top of this bullish flag, ostensibly the 0.78 handle, could open up the market to a move towards the 0.80 level above. If we pull back from here, I think there are plenty of opportunities underneath for buying as well, due to the fact that the US dollar continues to get a bit serrated by the Federal Reserve and Congress in the United States.

At this point in time, the market looks as if it is going to go looking towards the 0.80 level above, which is a large, round, psychologically significant figure. If we can break above there, then it kicks off the next leg higher. Ultimately, I do think that this is a market that will continue to see plenty of back and forth, but clearly it looks as if the pressure is building to the upside to take this much higher.

Ultimately, you should also take a look at the 50 day EMA underneath just above the 0.75 level as a potential support level as well. All things being equal, I think that short-term dips will probably offer buying opportunities, opening up a move to much higher prices. I have no interest in shorting the Australian dollar, unless of course the United States suddenly decides to stop doing anything related to stimulus, which of course is not going to happen anytime soon.