AUD/USD Price Forecast – Australian Dollar Showing Signs of Exhaustion
The Australian dollar has shown a proclivity for exhaustion near the 50 day EMA again, and it does look like we are perhaps trying to grind lower overall. That being said, the market looks likely continue to pay attention to all things stimulus related, and of course the fact that the Reserve Bank of Australia is likely to cut interest rates rather soon. With that being the case, I like fading short-term rallies when I get the opportunity, as market participants continue to look towards the US dollar for safety in uncertain times.
AUD/USD Video 26.10.20
Underneath, between the 0.71 level and the 0.70 level, there seems to be a zone of influence that will probably cause a bit of support. Furthermore, if we break down below there it will obviously be a start to a possible trend change, as we would have had a “lower low, lower high, followed by a break of the lower low.” Because of this, the market would be testing the 200 day EMA and once that gives, just about any metric you measure an uptrend by will have been turned around and we should go looking towards the greenback yet again.
That being said, it is most likely going to be a “risk off” type of event that make that happen so I think at this point we are more than likely going to see further downward pressure on rallies, as it certainly looks like we are trying to break down the whole idea of risk appetite. With the RBA looking to cut rates and of course the global economy looking a bit fragile to say the least, this makes perfect sense.
For a look at all of today’s economic events, check out our economic calendar.