AUD/USD Price Forecast – Aussie Dollar Continues to Test Resistance
The Australian dollar rallied during the early hours of Monday to reach towards the 0.73 level, which is a large, round, psychologically significant figure, and right in the middle of the massive resistance barrier that the market has been testing more than once. At this point in time, the market looks very likely to pull back from here given enough time. At the first signs of exhaustion, it is likely that the market could come down to the 0.7250 level rather quickly, and that perhaps down to the 50 day EMA after that.
AUD/USD Video 17.11.20
Keep in mind that the Reserve Bank of Australia is extraordinarily dovish last meeting, and even suggested that negative interest rates were not out of the question. If that is going to be the case, that is a very toxic for a currency, and could keep the Australian dollar a bit soft. That being said, the market is an extreme valuation right now, so it would make sense that at the very least we could go back and forth in this general vicinity. However, if we were to break above the 0.7350 level, then we would test the 0.74 handle. That is an area that has been massive resistance so if we can break above there it is likely that we go to the 0.75 level.
This is a market that is extraordinarily noisy at times, but recently we have seen a lot of stability. There is happiness about the vaccine coming, and the potential effect of it being out there on global growth. At this point though, I think we are far too ahead of ourselves right now and I think a pullback makes sense.
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