AUD/USD Price Forecast – Australian Dollar Pulls Back

The Australian dollar has pulled back a bit during the trading session on Tuesday as the previous uptrend line continues offer resistance. Ultimately, this is a market that I think continues to see a lot of volatility and quite frankly I think we are starting to see a lot of people worry about the global economy in general. The US dollar of course will be seen as a sanctuary and therefore people will go flooding towards the US dollar in order to protect wealth. A lot of this will have to do with the US bond market, so make sure that you want that, as well as headlines when it comes to the fiscal stimulus that people are waiting for the United States.

AUD/USD Video 14.10.20

The Australian dollar is a little bit of a strange animal at the moment though, because quite frankly the Aussie is highly levered to China, so therefore gets a little bit of a “pass” when it comes to some of the hardship that the highflying commodity currencies can endure in this type of environment. Having said that, we are approaching the 50 day EMA and if we break through their it is likely that we will head straight down to the 0.71 handle.

Between the 0.71 handle and the 0.70 level, there will be a lot of noise and I think it is very likely that it will be very difficult to break through. If we do, that will essentially be the “bottom falling out” of the Aussie dollar. As far as buying is concerned, I think it is difficult to do at this point because clearly, we are starting to see cracks in the ice when it comes to the Aussie.

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