AUD/USD Price Forecast – Australian Dollar Looking Heavy

The Australian dollar has initially tried to rally during the trading session on Tuesday but gave back the gains to turn things around and show just how exhausted the market appears to be. At this point in time, I believe that the market is likely to continue seeing the Australian dollar as being in a range, and we are most certainly at the top of it. With that in mind, it is likely that we could go down towards the 50 day EMA, which is closer to the 0.7150 level. Breaking down below that level then opens up the possibility of a move towards the 0.70 level again, which is where we currently find the 200 day EMA approaching.

AUD/USD Video 11.11.20

Breaking down below that EMA of course would be a very negative turn of events for longer-term traders, and therefore I think we would probably be looking at a relatively significant move. The market dropping from there could open up a move down to the 0.68 level, but obviously we would need to see some type of event to have that much of a “risk off” type of feel to the markets. There are plenty of things out there that could make this happen, not the least of which would be the Reserve Bank of Australia threatening negative interest rates in the future. If that does happen, it will be very negative for the Australian dollar in general.

To the upside though, if we were to break above the 0.74 level it would be a continuation of the rally from the bottom. At this point, it appears that there is a lot of resistance in that region and therefore it does not look likely to happen in the short term.

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