AUD/USD Price Forecast – Australian Dollar Continues to Test Major Area

The Australian dollar has been on an absolute tear lately, and as you can see on the chart looks very overextended. At this point, it is difficult to chase this market and it is highly likely that if the market dips below the 0.65 handle, it could send a fresh selling back into the market, perhaps aiming towards the 0.63 handle. After all, the Australian dollar is highly levered to the global economy, which is completely shot at this point. Yes, markets are trying to “look through the short term pain”, but the reality is going to be much different than a lot of the Australian dollar traders are pricing in right now.

AUD/USD Video 30.04.20

The RBA is likely to continue to show a lot of weakness, as the Australian economy has been crushed. In fact, Australia is in its first recession in over 30 years as they are so highly levered to China. At this point, you have to question whether or not there will be a lot of demand for industrial metals, which of course Australia is a major supplier of. Ultimately, this is a scenario where the Aussie is likely to pull back towards the 50 day EMA, perhaps even lower than that. Markets can only defy gravity for so long, so even if we are in a new long-term bull market, at the very least one would expect a sharp correction after this type of behavior.