AUD/USD Price Forecast – Continues to Dance Around 50 Day EMA

The Australian dollar has gone back and forth during the trading session on Tuesday as we continue to see a lot of back-and-forth trading right around the 50 day EMA. This is a market that looks like it is trying to figure out where to go next, but at this point I think this is more or less a short-term type of situation that we are struggling with, but I do think that it is very telling that suddenly we cannot go higher. If that is going to be the case, the market is likely to go looking towards the 0.71 handle, perhaps down to the 0.70 level underneath. That is a large, round, psychologically significant figure that has had an effect on the market more than once.

AUD/USD Video 07.10.20

Looking at this chart, I think it is safe to say that it is a good representation of just how confused the markets are in general. Because of this, and the fact that the Australian dollar is a good proxy for risk, I think you should expect this market to be somewhat noisy and difficult. However, we will eventually get some type of catalyst that we can follow. Once we do get that catalyst, then we can follow for much bigger move. Currently, it does look like the US dollar is starting to try to stabilize a bit, and that could be bad news for currencies like the Australian dollar. Furthermore, one can make the argument that perhaps without stimulus in the United States, the US dollar may have to strengthen anyway.

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