AUD/USD Price Forecast – Aussie Dollar Showing Overextension

The Australian dollar has shown itself to be rather overextended during the trading session on Monday, as people got excited about the prospect of a vaccine coming down the road. This of course will help global commerce in theory, and of course down the road. In the short term though I think that we are approaching a significant resistance barrier that should not be overlooked. With that in mind, I like the idea of taking advantage of value in theory, but right now I believe that we are still stuck in the same range. While we have seen a lot of noise out there, I think that at the end of the day what we need to pay attention to is the fact that the Reserve Bank of Australia is said to do massive stimulus, and possibly even negative rates, which is essentially the death knell of the currency.

AUD/USD Video 10.11.20

Regardless, I think were overextended and therefore we need to look at this is a market that could very well pull back. That pullback should be thought of as an opportunity, but in the short term I think what we are going to see is more choppiness than anything else. I would anticipate a move back to the 50 day EMA eventually, which could offer a nice opportunity. At this point, I anticipate that the one thing that you can probably count on is a lot of noisy trading but to think that we are simply going to go straight up in the air from here is a bit much.

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