AUD/USD Price Forecast – Australian Dollar Gives Up Early Gains

The Australian dollar has initially tried to rally during the trading session on Tuesday but gave back the gains to show less than enthusiastic buying. At this point, there are a lot of concerns going on in China when it comes to the Evergrande credit situation, and therefore I think it makes quite a bit of sense that we continue to see a lot of noisy behavior in general. After all, if the credit situation in China gets out of hand, that could cause major issues when it comes to contagion. In scenarios like that, the US bond market is without a doubt one of the most important and desirable market to be part of.

AUD/USD Video 22.09.21

If we break down below the hammer from the previous session on Monday, that should open up a significant selling and therefore could send this market looking towards the 0.71 handle. On the other hand, if we were to turn around and take out the 0.73 level to the upside, then we will test the 50 day EMA, followed by the 200 day EMA from everything I see. The one thing I think we probably can count on here is a lot of noisy behavior, as there are a lot of questions as to where the contagion would stop, and all eyes will be on Thursday as the interest payments are due for a major supply of Evergrande bonds. If they do in fact default, then it will be interesting to see how everything reacts, which I would anticipate being very negative across-the-board.

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This article was originally posted on FX Empire

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