AUD/USD Price Forecast – Australian dollar falls hard

The Australian dollar broke down rather significantly during the trading session on Tuesday, reaching down towards the lows that recently had been put in. With that, it makes sense that the market will continue to fade rallies as it has recently.
Christopher Lewis
AUD/USD daily chart, October 02, 2019

The Australian dollar has initially tried to rally during the trading session on Tuesday, but found selling again at the 0.6775 level, but has since fallen rather hard after a rather dovish RBA statement. At this point, it looks as if the Australian dollar is still on its back foot, and of course is getting no real help from the US/China trade situation. As long as that is going to be the case, this is a market that should continue to be negative in general, but all things being equal this is a market that is a bit extended. If we can break down to a fresh, new low, then it opens up the possibility of a move to the 0.65 handle. That is of course a level that will attract a lot of attention because it is such a large, round, psychologically significant figure.

AUD/USD Video 02.10.19

To the upside, the 50 day EMA which is painted in red on the chart, should be a significant resistance barrier. If we were to break above there it would obviously be a very strong sign, but at this point it’s very likely that we won’t even get anywhere near it. A break down below the lows could open up a bit of a “trapdoor” type of action as the market falls apart. Needless to say, the candle stick from the Tuesday session does not look good so I would have to think that sellers will return sooner rather than later in this market.

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