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AUD/USD Price Forecast – Australian Dollar Pulls Back to 50 day EMA

By:
Christopher Lewis
Published: May 4, 2020, 14:06 UTC

The Australian dollar has pulled back towards the 50 day EMA during the trading session on Monday, but then bounced enough to show signs of resiliency. At this point, the question is whether or not the Australian dollar can hang on.

AUD/USD

The Australian dollar has been very noisy as of late and has recently struggled with the idea of the 0.65 handle. Failing there does make quite a bit of sense from a longer-term standard, as the Australian dollar has gotten far ahead of itself. Remember, the Aussie dollar is an extremely sensitive currency pair when it comes to the global growth situation and of course the Chinese economy itself. With that being the case, and the fact that Donald Trump is now starting to talk about tariffs and China again, it makes quite a bit of sense that we will continue to see a lot of volatility in this pair.

AUD/USD Video 05.05.20

Ironically, the bond markets are not budging much during the trading session on Monday, showing that perhaps some of the fear that has entered the market is somewhat short term. If that is going to be the case, then we will probably see this market will try to go towards the 0.65 level above. If we break down below the 50 day EMA, then we could start drifting towards the 0.63 level, which was my original thought. At this point in time, it is probably going to come down to the risk appetite of traders in general and not so much anything to do with the Australian dollar itself. Expect a lot of noise, but eventually we should get some type of clarity that will send this market in one direction or the other. I would anticipate it is probably easier to get a big move to the downside than it is higher.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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